HSBC Cuts Nvidia to Hold, Slashes Target to $170 on Succession and Export Risk

HSBC cut Nvidia to hold from buy on Friday, Nov. 13, and halved its price target to $170 from $365, arguing the stock cannot recover until the company names a permanent successor to Jensen Huang. The call, by analyst Frank Lee, landed two days after Huang resigned as CEO and director, and four days before Nvidia reports fiscal third-quarter results.

Shares fell more than 4% immediately after the downgrade, CNBC reported, and closed Friday at $162.85, down 2.01%, according to 24/7 Wall St. That close capped a week in which the stock lost 12.75%. Some reports put HSBC's prior target at $375; CNBC gave $365.

What did Frank Lee actually say?

Lee framed the downgrade around two risks. The first is leadership. Colette Kress, the chief financial officer, now serves as interim chief executive. "We believe the uncertainties will prevail until a permanent succession plan is laid out and the new CEO is able to demonstrate execution capabilities," Lee wrote in a note to clients, as CNBC reported.

The context is uncomfortable. Huang resigned on Nov. 11 after reports about his relationship with a former executive of Nvidia customer Megaspeed. The company gave no reason for the resignation. Huang has denied compromising national security.

The second risk is exports. Lee quantified the exposure with unusual precision. "During the past six quarters, 11% of total revenue was from countries excluding the US and Taiwan, which we believe could be the focus of restrictions," he wrote, according to CNBC.

His sensitivity analysis follows directly from that figure. If Nvidia loses 11% of fiscal 2028 revenue, EPS could fall 13% against HSBC's base case of $15.65. The bear case lands at $13.57, which sits 14% below current consensus of $15.77. The $170 target works out to roughly 11 times the base-case EPS, by 24/7 Wall St.'s arithmetic.

How deep is the analyst retreat?

HSBC is the latest in a cluster of downgrades this week rather than an outlier. The list of firms cutting the stock, per CNBC, includes:

• Truist
• Evercore ISI
• William Blair
• Oppenheimer
• Bernstein

24/7 Wall St. counted at least nine hold-type downgrades since Huang's exit, including KeyBanc. Baird had already moved earlier, as did Melius.

Not everyone has turned bearish. Barclays cut its target to $210 from $275 and DA Davidson to $200 from $300, but both kept positive ratings. Wells Fargo maintained an overweight rating with a $300 target. The spread between HSBC's $170 and Wells Fargo's $300 is the widest signal of disagreement the stock has seen in some time.

Why the Tuesday report matters

Nvidia reports fiscal third-quarter results after the close on Tuesday, Nov. 17 — its first under Kress. The numbers will do double duty. They must carry the usual burden of justifying a premium valuation, and they arrive while the market prices in a leadership vacuum.

For a company whose valuation rests on execution credibility, an interim chief presenting her first quarter is not a comfortable position. The consensus may prove more durable than HSBC fears, or the 13% EPS haircut may look conservative if restrictions extend beyond the 11% of revenue Lee flagged. Tuesday's call should reveal which risk the market chooses to price first.