Nvidia is facing fresh questions from investors about its outlook as the company investigates CEO Jensen Huang’s relationship with a woman alleged to be a Chinese spy.
Huang said Sunday that he had been unfaithful to his wife and had fallen short of his responsibilities to Nvidia. He also said he would cooperate with the inquiry.
Nvidia’s board has launched an independent investigation. It said it has no reason to believe national security or company secrets were compromised, but the review will consider all available information.
The controversy has prompted several firms to reassess their views of Nvidia shares. Baird issued a rare downgrade, moving the stock to “neutral.” The firm cited limited visibility into data-center spending in 2027, potential softness in demand and uncertainty about Huang’s future at the company.
Morgan Stanley removed Nvidia from its Top Pick list but kept its “overweight” rating. The shares have fallen more than 25% since the firm added them to the list last month.
“We do acknowledge that the near-term uncertainty will remain, as CEO Jensen Huang’s leadership is crucial to the company’s direction in our view,” Morgan Stanley analysts wrote.
Bank of America Global Research also dropped Nvidia from its U.S. 1 List. At least three other brokerages, including Wells Fargo and Citigroup, lowered their price targets earlier this week.
Nvidia shares have also been affected by a broader technology selloff following the midterm elections, in which Democrats won majorities in both chambers of Congress. The company’s losses deepened after news of the controversy emerged.
Over the first two trading sessions after Huang disclosed the affair and the board announced its inquiry, Nvidia lost more than $427 billion in market value. The stock rose about 3.5% by mid-afternoon Wednesday.
Despite investor concerns, Nvidia remains a widely favored stock on Wall Street. LSEG data puts its median price target at $314, suggesting roughly 82% upside from current levels. Of 64 brokerages, 59 rate the shares “buy” or “strong buy.”
