HSBC analyst Frank Lee expressed concerns that Nvidia will face challenges until a permanent CEO is appointed to replace Jensen Huang, who recently left amid controversy. Lee lowered the price target for Nvidia's stock to $170 from $365, indicating only a 2.3% potential upside from its recent closing price.
He highlighted that tightened export restrictions could affect Nvidia's fiscal year 2028 earnings per share by 13%, particularly as 11% of the company's revenue comes from regions that may be targeted by these restrictions.
Following the downgrade, Nvidia's shares dropped over 4%, reflecting a broader trend as multiple financial institutions, including Truist and Evercore ISI, have also reduced their ratings on the stock.
This situation underscores the critical role Nvidia plays in the AI supply chain, often referred to as the 'central bank of AI,' and raises questions about its future performance amid leadership and regulatory uncertainties