Nvidia Stock Draws Rare Downgrades as Board Probes CEO Jensen Huang’s Affair

Bullseye American Ingenuity Fund portfolio manager Adam Johnson said Nvidia remains a buy, arguing that the company’s growth outweighs the executive controversy.

Artificial intelligence giant Nvidia is facing investor scrutiny over its future as the company’s board conducts an internal investigation into CEO Jensen Huang’s admission that he was unfaithful to his wife and acknowledged that he fell short of his responsibilities to the company. Huang said in a statement Sunday that he would cooperate with the investigation.

The Nvidia board said it initiated an independent probe, adding that while it had no reason to believe national security or company secrets were compromised, the inquiry would examine all available information.

The controversy has prompted some firms to reassess Nvidia’s shares. Baird issued a rare downgrade of Nvidia stock, cutting the AI giant’s rating to “neutral” because of a lack of visibility into 2027 data center spending, possible demand softness, and uncertainty over Huang’s tenure.

Nvidia CEO Jensen Huang said Sunday that he would cooperate with the inquiry and is committed to Nvidia and U.S. national security. (Sean Rayford/Getty Images)

Morgan Stanley also removed Nvidia from its Top Pick list, although the firm retained its “overweight” rating. The stock has since declined more than 25% since the designation last month. Analysts said they acknowledge that near-term uncertainty will remain, as Huang’s leadership is crucial to the company’s direction in their view.

Bank of America Global Research also took Nvidia off its U.S. 1 List, while at least three other brokerages, including Wells Fargo and Citigroup, reduced their price targets earlier this week.

Huang co-founded Nvidia and has transformed the company into a leader in the AI race. (Patrick T. Fallon/AFP via Getty Images)

Nvidia shares have been caught in a broader tech selloff after the midterm elections showed Democrats winning majorities in both chambers of Congress, with the stock’s difficulties deepening amid the controversy.

In the first two trading sessions after Huang disclosed the affair and Nvidia’s board opened its inquiry, the company shed more than $427 billion in market capitalization.

The stock rebounded during Wednesday’s trading session, with shares up about 3.5% as of mid-afternoon.

Despite investor questioning of Nvidia’s outlook, the company remains one of the most favored stocks on Wall Street.

Nvidia carries a median price target of $314, according to LSEG data, which implies about 82% upside from its current levels, with 59 of 64 brokerages rating the shares as a “buy” or “strong buy.”

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