HSBC Halves Nvidia Target to $170 as CEO Exit Triggers Downgrade Wave

HSBC cut its Nvidia price target by roughly 54% on Friday, to $170 from about $370, and downgraded the stock to Hold from Buy. Nvidia (NASDAQ:NVDA) closed at $162.85, so the new target implies just 4.4% upside, against an average Wall Street target of $279.63 that implies about 72% upside.

HSBC analyst Frank Lee cited two drivers. The first is leadership: Jensen Huang resigned Thursday, CFO Colette Kress became interim CEO, and Lee expects the stock to stay under pressure until a formal succession plan produces a permanent CEO who can execute. The second is exports: about 11% of Nvidia's revenue over the past six quarters came from countries outside the U.S. and Taiwan that could face tighter chip export rules.

The business itself is still expanding at speed. Nvidia reported $96.22 billion in revenue last quarter, up 105.8% year over year. Management said demand runs well ahead of what its supply chain can deliver.

What does the export risk cost in earnings?

Lee's export exposure likely overlaps with the sovereign and regional cloud buyers in Nvidia's ACIE segment, which posted $40 billion in revenue last quarter, up 138% year over year. In his bear case, losing that revenue would cut fiscal 2028 EPS by 13%, from $15.65 to $13.57.

The market has already priced much of that scenario. At Friday's close, Nvidia trades at about 10 times HSBC's base-case EPS and about 12 times the bank's most pessimistic estimate, so even the downside case leaves the stock cheap by historical standards.

The stock trades at about 11 times forward earnings, its lowest multiple in 15 years. Shares have fallen 23.78% since October 29. HSBC's $170 target works out to about 11 times Lee's base-case EPS, meaning he assumes today's discount persists rather than closes.

A target this close to the price is a neutral call. Lee sees limited reward but stops short of telling clients to sell.

How deep is the downgrade wave?

HSBC is one of at least nine Hold-type downgrades since Huang's exit. The list includes Truist, Bernstein, KeyBanc, Evercore ISI and Oppenheimer. Others trimmed targets but stayed positive: Barclays cut to $210 from $275, and DA Davidson to $200 from $300.

Wells Fargo kept an Overweight rating with a $300 target. Consensus remains Buy across 61 analysts. One camp sees a lasting reset; the other sees a temporary leadership discount.

A leadership discount can survive strong demand because the next CEO inherits large commitments. Nvidia has committed nearly $50 billion in frontier AI labs and expects lab demand backed by its balance sheet to contribute roughly a quarter of next year's business. Guarantee obligations for cloud and data center partners are ended at $108.5 billion.

What happens at Tuesday's earnings?

Selling accelerated after the downgrade. Nvidia fell 2.01% Friday to a $3.93 trillion market value and slid to $161.04 after hours. That sealed a 12.75% weekly loss, its sixth straight and its worst since a 14.0% drop in April 2025.

Shares are down 12.48% this year, while the S&P 500 is up 10.62%. The 52-week low of $148.80 is the next reference point.

The next quarterly report is expected Tuesday after the close. Management guided to $108.0 billion in revenue, plus or minus 2%, and called its roughly 70% fiscal 2028 growth outlook supply-constrained.

Holding that guidance and naming a credible permanent CEO would undercut HSBC's view. More downgrades and estimate cuts would support it.

The gap between a $170 target and a $279.63 average suggests more upside than HSBC allows — as long as Tuesday's guidance confirms demand is intact. Investors seeking AI exposure without the succession question are looking at Broadcom (NASDAQ:AVGO), where AI semiconductor revenue rose 221% to $16.70 billion last quarter, with guidance of $21.70 billion for the next.