Bernstein halves NVIDIA target as leadership doubts rise

By Rebecca Stone

Bernstein cut NVIDIA’s price target to $200 from $400 and downgraded the stock to Market Perform from Outperform, according to 24/7 Wall St., after the chipmaker fell 8.62% in after-hours trading.

NVIDIA (NASDAQ:NVDA) closed Wednesday’s regular session at $173.73, up $4.84, or 2.87%. At 7:59 p.m. ET, shares traded at $158.76, down $14.97, or 8.62%, below the 52-week low of $164.27.

Unconfirmed reports said NVIDIA’s board was preparing to oust CEO Jensen Huang. 24/7 Wall St. cited two back-to-back affairs in recent days and said many board members were seeing Huang as a liability.

Bernstein followed with the 50% target cut. Its team wrote that it had “had enough.” The brokerage released no fuller reasoning, leaving investors with the rating, target and terse assessment.

The 62 analysts covering NVIDIA still carried an average rating of Strong Buy and an average target of $316.48, roughly 82% above Wednesday’s close. 24/7 Wall St. said that average had not yet absorbed a day with two downgrades and a top-pick removal.

The source also argued that the consensus probably overstated the remaining upside. Its market framing put $200 beside $316.48 as competing reference points, with visibility and leadership driving the debate while chip demand still exceeds supply.

The split matters because the selloff did not erase the operating record. Baird still said demand for NVIDIA chips exceeded supply, and 24/7 Wall St. said the latest-quarter demand picture had held. Its stated reasons point to visibility and leadership instead.

What does $200 signal about AI spending?

Baird moved first Wednesday morning, cutting NVIDIA to Neutral from Outperform and lowering its target to $200 from $500. The brokerage said visibility had deteriorated enough that it would hold off on publishing 2027 data center forecasts.

Baird expects slower AI spending growth from large cloud companies in 2027. It also flagged uncertainty over whether Huang stays into 2027, while noting that demand for NVIDIA chips still exceeds supply.

Bernstein reached the same $200 figure Wednesday evening. 24/7 Wall St. said two identical targets in one day gave the market a new reference point and were likely to anchor trading beside the higher consensus average.

This matters because the two firms reached the number for different documented reasons. Baird published a visibility warning and slower-spending expectation; Bernstein offered a downgrade and “had enough,” but no public forecast behind it.

The split creates a less tidy setup than a simple earnings reset. Baird withdrew forecast numbers but retained an expectation of slower growth; Bernstein changed the rating and target without publishing its reasoning. Investors face a lower valuation marker without a common set of revised forecasts to test it against.

Which signals are fundamental, and which are mechanical?

24/7 Wall St. drew a sharp distinction. 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 by withholding its 2027 numbers.

• Morgan Stanley: Analyst Joseph Moore removed NVIDIA as the firm’s top semiconductor pick under a stop-loss policy after the stock fell more than 25% since October. He kept an Overweight rating and a $300 target.
• Bank of America: The bank removed NVIDIA from its top U.S. stock-pick list on Tuesday.

The Morgan Stanley and Bank of America moves track holdings and price rules. 24/7 Wall St. said they offer less insight into the business than a cut to earnings forecasts.

Neither action described here revised earnings estimates. Morgan Stanley’s price-triggered removal and Bank of America’s list change therefore offer less evidence about customer demand than Baird’s decision to withhold its 2027 data center numbers.

The reasons on record point to visibility and leadership, the source said, while the demand picture from the latest quarter has held. The source therefore treated guidance and leadership clarity as central tests.

What does NVIDIA’s valuation already assume?

24/7 Wall St. put NVIDIA at a trailing price-to-earnings ratio of about 22 and a forward ratio of about 14x. For a stock long priced as a premium growth name, a mid-teens forward multiple suggests the market questions whether current earnings estimates will hold or expects growth to fade quickly after next year.

The estimates behind that valuation rest on strong reported results. According to 24/7 Wall St.:

• Second-quarter fiscal 2027 revenue reached $96.22 billion, up 105.8% year over year.
• 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.”
• NVIDIA guided fourth-quarter gross margins down to 71% to 72% as memory costs climb.

Bernstein’s $200 target sits about 15% above Wednesday’s close and about 26% above the after-hours price. 24/7 Wall St. said the Market Perform rating means limited reward for the risk, even though the target still implies upside from both levels.

Those figures also place present demand against future profitability. 24/7 Wall St. noted that strong revenue and a supply-constrained outlook coexist with lower gross margins as memory costs climb. The quarterly report can arrive on schedule, yet leadership and forecast uncertainty can still pressure the stock.

Has the selloff broken the broader market?

NVIDIA shares fell 13.19% over the past week and 23.24% over the past month. The stock was down 6.63% year to date, while the S&P 500 was up 11.42%.

Thin after-hours trading amplifies moves, so Thursday’s open should establish a more reliable price. The next catalyst is the quarterly report, expected next Tuesday after the close.

What can next week’s earnings report settle?

24/7 Wall St. called the valuation reasonable. At about 14 times forward earnings, with demand above supply, the market was pricing NVIDIA as if its growth was ending.

The pessimistic case remains credible. 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.

Next week’s report will test whether customers paused. If guidance holds and the board clarifies succession, the $316.48 average target looks reachable over time, although no target is a guarantee.

How does Broadcom compare?

24/7 Wall St. offered Broadcom (NASDAQ:AVGO) as a comparison for AI-chip exposure without NVIDIA’s leadership question. Broadcom’s AI semiconductor revenue rose 221% to $16.70 billion last quarter, and the company guided to $21.7 billion next quarter.

Broadcom shares were up 0.29% year to date. The source placed the company within a wider AI expansion that extends beyond chipmakers, including suppliers for power and cooling.

Next Tuesday’s report provides the near-term test: guidance that holds and succession clarity would support the $316.48 average target over time, while evidence that customers paused would reinforce the downgrade case.