HSBC Cuts Nvidia to Hold, Slashes Price Target 54% to $170

HSBC analyst Frank Lee downgraded Nvidia (NASDAQ:NVDA) to Hold from Buy on Friday and cut his price target by roughly 54%, from about $370 to $170. Nvidia closed Friday at $162.85, meaning the new target implies only about 4.4% upside. The average Wall Street target of $279.63 implies roughly 72% upside, and analysts disagree sharply over which figure is more realistic.

Lee's prior target sits at either $365 or $375, according to reports — the bank's published history is itself disputed. What is not disputed is the scale of the cut: more than half the implied value, removed in one note. A 54% target reduction on a stock still growing revenue at triple digits is the tension at the center of this story.

The business Lee downgraded is still expanding quickly. Nvidia reported $96.22 billion in revenue last quarter, up 105.8% from a year earlier, and management said customer demand runs well ahead of what its supply chain can deliver. What changed is the top of the company: Jensen Huang resigned on Thursday, and CFO Colette Kress became interim CEO. Investors now have to price record sales alongside an open succession question.

What Is HSBC's Bear Case?

Lee's first argument is leadership. He expects the stock to stay under pressure until Nvidia sets out a formal succession plan and a permanent CEO demonstrates they can execute. That is a testable claim, but it comes with a caveat the downgrade note does not fully address: interim chiefs have run major technology companies for a year or more without measurable demand damage.

His second argument 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. That group likely overlaps with the sovereign and regional cloud buyers in Nvidia's ACIE segment (its unit for state-backed and regional AI infrastructure customers), which posted $40 billion in revenue last quarter, up 138% year over year.

Lee's math on that risk is specific. Losing the exposed revenue would cut fiscal 2028 earnings per share by 13% in his bear case, from $15.65 to $13.57. But the gap looks small next to the slide Nvidia shares have already taken. At Friday's close, the stock trades at about 10 times HSBC's base-case EPS and about 12 times the bank's most pessimistic estimate — meaning even the downside scenario leaves the stock cheap by conventional measures. The bear case is about leadership and policy, not about the current numbers breaking.

How Cheap Is Nvidia Right Now?

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. In effect, Lee assumes today's discount remains in place rather than closes. A target this close to the current price is a neutral call — Lee sees limited reward, but he stops short of telling clients to sell.

The skeptic's caveat writes itself here. A low multiple signals value only if earnings estimates hold. The wave of downgrades since Huang's exit suggests many analysts expect forecasts to drift lower before they stabilize. A cheap stock can stay cheap while the numerator shrinks underneath it.

How Many Analysts Have Downgraded Nvidia?

HSBC is one of at least nine Hold-type downgrades since Huang's exit, a list that includes:

• Truist
• Bernstein
• KeyBanc
• Evercore ISI
• Oppenheimer

Others trimmed targets but stayed positive. Barclays cut to $210 from $275, and DA Davidson cut to $200 from $300. Wells Fargo kept an Overweight rating with a $300 target. Consensus across 61 analysts remains Buy — so one camp sees a lasting reset while 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. Those are real obligations, not just optionality, and they shape who can credibly take the job.

What Has the Stock Done?

Selling sped up after the downgrade. Nvidia fell 2.01% Friday to a $3.93 trillion market value and slid to $161.04 after hours. That ended a 12.75% weekly loss — its sixth straight weekly decline 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 for chart watchers.

The next quarterly report is expected Tuesday after the close. Management guided to $108.0 billion in revenue, plus or minus 2%, and has called its roughly 70% fiscal 2028 growth outlook supply-constrained — a phrase that frames any shortfall as a manufacturing ceiling rather than a demand problem. Six straight losing weeks into an earnings print is the setup; Tuesday decides whether it extends or reverses.

What Does the Downgrade Actually Mean?

Two outcomes would settle the argument. Holding the $108.0 billion guidance and naming a credible permanent CEO would undercut HSBC's view. More downgrades and estimate cuts would support it.

The valuation case for Nvidia looks strong on paper. The price already reflects something close to HSBC's export bear case at about 11 times forward earnings, while demand still exceeds supply. But the risks are stacked, not isolated: a long stretch without a permanent CEO, tighter export rules, and financing commitments to AI labs all land on the same balance sheet. Guarantee obligations for cloud and data center partners are ended at $108.5 billion, a figure a new CEO will have to manage directly.

For investors seeking AI exposure without the succession question, Broadcom (NASDAQ:AVGO) is the comparison the market is already trading on. Its AI semiconductor revenue rose 221% to $16.70 billion, and it guided to $21.70 billion for next quarter.

For Nvidia itself, the gap between a $170 target and a $279.63 average suggests more upside than HSBC allows — but that gap only holds if Tuesday's guidance confirms demand is intact. The downgrade is a bet on governance and export policy, not on Nvidia's ability to sell chips; Tuesday's report is the first evidence either way.