Bernstein Cuts Nvidia Target in Half to $200 as Board Report Hits

Bernstein halved its Nvidia price target to $200 from $400 on Wednesday evening, downgrading the stock to Market Perform from Outperform and declaring its team had "had enough." The cut came hours after Baird reached the same $200 figure, and after reports that Nvidia's board is preparing to oust CEO Jensen Huang — reports the company has not confirmed.

Nvidia (NASDAQ:NVDA) closed Wednesday's regular session at $173.73, up $4.84, or 2.87%. By 7:59 p.m. ET it traded at $158.76, down $14.97, or 8.62%, putting it below its 52-week low of $164.27. Thin after-hours trading amplifies moves, so Thursday's open will set a more reliable price.

What happened between the close and the after-hours drop?

Two things. First, the reports emerged that the board is preparing to remove Huang. The company has not confirmed them. But with two back-to-back affairs in the past few days, many board members now see Huang as a liability, according to the reports.

Then Bernstein made its evening call. The full reasoning hasn't been made public, so investors have to work with the rating, the target, and the "had enough" line. Two identical targets in a single day give the market a new reference point. $200 now sits beside the consensus average as a number traders will anchor to.

How do the downgrades break down?

Baird moved first on Wednesday morning, cutting Nvidia to Neutral from Outperform and lowering its target to $200 from $500. Baird said visibility had deteriorated enough that it's holding off on publishing 2027 data center forecasts. It expects slower AI spending growth from large cloud companies in 2027 and flagged uncertainty over whether Huang stays into 2027 — though it noted demand for Nvidia chips still exceeds supply.

Morgan Stanley's move was mechanical. Analyst Joseph Moore removed Nvidia as the firm's top semiconductor pick under a stop-loss policy after a drop of more than 25% since October, while keeping an Overweight rating and a $300 target.

Bank of America removed Nvidia from its top U.S. stock-pick list on Tuesday.

The distinction matters. A fundamental downgrade says earnings will fall short. A visibility downgrade says the analyst can no longer forecast with confidence — which is what Baird described when it held back its 2027 numbers. The Morgan Stanley and BofA moves track holdings and price rules, so they offer less insight into the business than earnings-forecast cuts would.

Meanwhile, the 62 analysts covering Nvidia still average a Strong Buy rating and a $316.48 target, roughly 82% above Wednesday's close. That average hasn't yet absorbed a day with two downgrades and a top-pick removal, so the upside it implies is probably too high.

What does the valuation say?

Nvidia trades at a trailing P/E of about 22 and a forward P/E of about 14x. For a stock long priced as a premium growth name, a mid-teens forward multiple implies the market either questions whether current earnings estimates will hold or expects growth to fade quickly after next year.

Those estimates rest on strong results. Second-quarter fiscal 2027 revenue reached $96.22 billion, up 105.8% year over year, and guidance called for $108.0 billion, plus or minus 2%, excluding China data center compute. Management projected roughly 70% revenue growth in fiscal 2028 and called it "a supply-constrained outlook." It also guided gross margins down to 71% to 72% in the fourth quarter as memory costs climb.

Even the downgraders sit above the price. Bernstein's target is about 15% above Wednesday's close and about 26% above the after-hours price — a neutral rating that means limited reward for the risk, while still implying upside from current levels.

How badly has momentum broken?

Shares fell 13.19% over the past week and 23.24% over the past month. Year to date, the stock is down 6.63%, while the S&P 500 is up 11.42%. The next catalyst is the quarterly report, expected next Tuesday after the close.

The pessimistic view deserves respect. Leadership uncertainty, weaker visibility into 2027 cloud spending, and analysts unwilling to publish forecasts can keep the stock under pressure even if earnings arrive on schedule.

At about 14 times forward earnings, with demand above supply, the market is pricing Nvidia as if its growth is ending. Next week's report will show whether customers paused. If guidance holds and the board clarifies succession, the $316.48 average looks reachable over time — though no target is a guarantee.

For comparison, Broadcom (NASDAQ:AVGO) offers AI chip exposure without the leadership question. Its AI semiconductor revenue rose 221% to $16.70 billion last quarter; it guided to $21.7 billion next quarter, and its shares are up just 0.29% year to date.