HSBC Just Downgraded Nvidia and Cut Its Target to $170
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On Friday, Nvidia (NASDAQ:NVDA | NVDA Price Prediction) closed at $162.85, and HSBC now values it at $170, about 4.4% higher. The average Wall Street target of $279.63 implies roughly 72% upside, and analysts disagree sharply over which figure is more realistic.
HSBC analyst Frank Lee downgraded the stock to Hold from Buy and more than halved his target, a cut of about 54% from about $370. Reports put the prior figure at either $365 or $375.
The business he downgraded is still expanding quickly. Nvidia reported $96.22 billion[1] 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.
HSBC’s Two-Part Bear Case Goes Beyond the CEO Exit
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 shows they can execute.
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, which posted $40 billion[2] in revenue last quarter, up 138% year over year. Losing that revenue would cut fiscal 2028 EPS by 13% in his bear case, from $15.65 to $13.57.
That gap is small next to the slide. At Friday’s close, Nvidia trades at about 10 times HSBC’s base-case EPS and about 12 times the bank’s most pessimistic estimate, so even that downside scenario leaves the stock cheap.
A 15-Year Low Multiple Meets a Target With Little Room
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 target works out to about 11 times Lee’s base-case EPS. Lee is assuming today’s discount remains rather than closes.
A target this close to the price is a neutral call. Lee sees limited reward, but he stops short of telling clients to sell.
A low multiple signals value only if estimates hold. The wave of downgrades suggests many analysts expect forecasts to drift lower before they stabilize.
Nine Downgrades Against a Buy Consensus
HSBC is one of at least nine Hold-type downgrades since Huang’s exit, a list that includes Truist, Bernstein, KeyBanc, Evercore ISI and Oppenheimer. Others trimmed but stayed positive, with Barclays cutting to $210 from $275 and DA Davidson to $200 from $300.
Wells Fargo kept Overweight with a $300 target. Consensus remains Buy across 61 analysts, 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[2] in frontier AI labs and expects lab demand backed by its balance sheet to contribute roughly a quarter of next year’s business.
Six Straight Weekly Losses Heading Into Earnings
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 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.
The next quarterly report is expected Tuesday after the close. Management guided to $108.0 billion[1] in revenue, plus or minus 2%, and called its roughly 70%[2] fiscal 2028 growth outlook supply-constrained.
Holding that guidance and naming a credible permanent CEO would undercut HSBC’s view. More downgrades and estimate cuts would support it.
What HSBC’s Downgrade Means for NVDA Stock
The valuation case for Nvidia looks strong here. The price already reflects something close to HSBC’s export bear case at about 11 times forward earnings, while demand still tops supply.
The risk is a long stretch without a permanent CEO combined with tighter export rules and the financing commitments to AI labs. Guarantee obligations for cloud and data center partners are ended at $108.5 billion[1], which a new CEO will have to manage.
For investors exploring AI exposure without the succession question, Broadcom (NASDAQ:AVGO) is worth a closer look. Revenue from AI semiconductors rose 221% to $16.70 billion, and it guided to $21.70 billion next quarter.
For Nvidia itself, the gap between a $170 target and a $279.63 average suggests more upside than HSBC allows. That holds as long as Tuesday’s guidance confirms demand is intact.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
