Huang exit triggers Nvidia downgrade, $200 target

The leadership crisis at Nvidia escalated quickly. Media reports had already revealed that the board was preparing to remove Jensen Huang before the company confirmed his resignation in a regulatory filing. The revelations included an intimate relationship with a second employee who reports to him, following earlier news of his relationship with Alice Huang, an executive at Nvidia customer Megaspeed. The New York Times reported that U.S. intelligence assessed China's Ministry of State Security had recruited her to gather information on him, a claim China's Foreign Ministry has called unsubstantiated.

The scandal also drew political attention: Huang admitted to an affair on Nov. 8, Nvidia's board opened an independent investigation, and lawmakers have called for congressional scrutiny. Against that backdrop, Wall Street analysts moved to reassess the stock. Bernstein's Stacy Rasgon acknowledged that the business fundamentals remain intact, with numbers that remain massive and probably still headed higher, but flagged the risk of further allegations and uncertainty over who will succeed Huang. Oppenheimer's Rick Schafer warned of a potential brain drain and named AMD, Marvell and Broadcom as possible beneficiaries of Huang's departure. Other firms took a more measured stance: Stifel kept its Buy rating but cut its target to $205 from $315, treating a leadership change as its base case, while Citi kept Buy but lowered its target to $225 and suggested Kress could serve as interim CEO, which has now happened. Mizuho, UBS and Raymond James maintained bullish ratings, with UBS flagging a possible pause in Nvidia's funding of AI companies that could temporarily remove about $50 billion from the ecosystem, along with the risk of tighter export restrictions.