DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

Nvidia investors faced mounting uncertainty as the chip giant’s board reportedly met to consider CEO Jensen Huang’s future. The meeting followed reports involving a second extramarital affair, while six analysts downgraded Nvidia stock between Wednesday night and Thursday morning.

The New York Times reported Wednesday that Huang had engaged in an extramarital affair with an employee. He was already under scrutiny after admitting to a romantic relationship with a woman whom U.S. intelligence believes is a Chinese spy.

Nvidia had not publicly addressed Huang’s future, though CNBC confirmed late Wednesday that the board was meeting to decide whether to remove him. Huang has led Nvidia for more than 30 years, making the prospect of his departure a major concern for analysts and investors.

The stock was down 7% for the week after falling 4.3% Monday and 5.5% Tuesday as reports about Huang spread globally. Shares recovered 2.9% Wednesday, but were roughly 5.4% lower in Thursday premarket trading.

Ben Reitzes of Melius Research, a longtime Nvidia bull, cut his rating from buy to hold. He also reduced his price target to $185 from $315, leaving the new target 6% above Wednesday’s closing level.

“In this unique crisis, we have decided (reluctantly) to step aside on Nvidia (now a Hold) after recommending it since we launched our AI platform coverage universe in July 2023,” Reitzes said. He described Nvidia as a stronger and more important company than HP was during its 2010 leadership crisis, but noted that markets now move much faster.

Mark Lipacis downgraded Nvidia from outperform to in line and slashed his price target to $186 from $465. That revised target implied 7% upside from Wednesday’s close.

Lipacis said the investigation would take time and expected Nvidia’s price to earnings multiple to keep contracting. He also pointed to the absence of an obvious succession plan or a clear number two operational executive.

Sebastien Naji of William Blair lowered Nvidia from outperform to market perform. He said Huang’s likely departure and heightened scrutiny would weigh on the shares in the near term, while slower AI development and stronger competition from other chipmakers could add execution risk.

Rick Schafer also downgraded Nvidia, moving the AI stock from outperform to perform and removing his price target. Although he saw potential upside to Nvidia’s fiscal third quarter results and fourth quarter outlook, he expected business fundamentals to take a backseat as the leadership crisis unfolded.

Stacy Rasgon cut his $400 price target and downgraded Nvidia from market outperform. He said the company’s business fundamentals remained intact and its financial numbers were still massive, but argued that further allegations, governmental investigations and uncertainty over leadership made a major investment difficult to advocate.

John Vinh downgraded Nvidia from overweight, saying Huang’s departure would materially increase strategic, organizational and execution risks. Although he expected core fundamentals to remain strong, he said finding a successor with Huang’s leadership and strategic vision would be challenging.

Tech bull Dan Ives said the situation could remain fluid over the next 48 hours. He valued Nvidia at $300 per share with Huang as CEO and $225 without him, calling the turmoil “a dark day for Nvidia” while maintaining that the company could remain central to the AI revolution.

Citi analysts reduced their Nvidia target to $225 from $285. Malik and Sylla said Huang’s removal would end an era and create a stock overhang because of his central role in strategy, product vision, customer relationships and investor confidence.

The Citi analysts said Nvidia CFO Colette Kress could become interim CEO while directors considered outside candidates. CIO Nathan Thooft noted that Nvidia still has 40,000 other employees and substantial talent, but said the larger risk involved replacing Huang’s foresight over the next several years.

Greifeld criticized the board’s succession planning but said Nvidia’s low valuation multiple meant there was no bubble to burst. CIO Richard Reyle was more severe, saying the board had backed itself into a corner without a successor and warning that the stock could move “lower and much lower from here.”

UBS global wealth management chief investment officer Mark Haefele and his team said the upheaval highlighted concentration risk in technology portfolios. They retained confidence in AI’s long term potential, but warned that elevated expectations and sharply different company outcomes could expose concentrated investors to company specific setbacks.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.