Nvidia (NASDAQ: NVDA) faced analyst downgrades on November 10 as Bank of America removed the chipmaker from its highest-conviction US 1 List and Wells Fargo cut its price target from $315 to $300. Both actions followed a November 10 trading session in which NVDA fell 4.27% to $178.67, extending recent declines even as other technology stocks recovered. The downgrades stem from growing uncertainty surrounding CEO Jensen Huang after Nvidia's board announced an independent investigation on November 8 into reports of a foreign intelligence operation targeting the executive. Despite the changes, both banks maintained bullish ratings—Bank of America kept its Buy rating and $350 price target, while Wells Fargo retained its Overweight rating—highlighting a distinction between Nvidia's long-term earnings potential and immediate investment risks. The moves arrive amid a broader semiconductor valuation reset, with chip stocks trading near 13.7 times forward earnings, a roughly 22% discount to the S&P 500.
Bank of America Removes Nvidia from US 1 List While Maintaining Buy Rating
Bank of America removed Nvidia, Micron Technology (MU), and Lam Research (LRCX) from its US 1 List on November 10. The US 1 List consists of selected investment ideas drawn from the bank's Buy-rated US stocks. All three chipmakers retained their Buy ratings, meaning the change represents a reduction in their preferred-list status rather than a formal downgrade. The bank did not publicly disclose a specific reason for the removals in the available reporting.
Bank of America's semiconductor research indicates that the sector has experienced an approximately 37% correction, leaving chip stocks trading near 13.7 times forward earnings. That represents a roughly 22% discount to the broader S&P 500, reflecting the technology sector's declining valuation premium. Bank of America maintained its Buy rating and $350 price target for Nvidia, implying nearly 96% upside from the November 9 closing price.
Wells Fargo Cuts Nvidia Price Target from $315 to $300 Amid Leadership Uncertainty
Wells Fargo lowered its Nvidia price target by approximately 4.8%, from $315 to $300, citing uncertainty surrounding CEO Jensen Huang and the potential consequences of ongoing investigations. The decision follows Nvidia's November 8 board announcement confirming an independent investigation into reports that Huang had been targeted by a foreign intelligence operation. The company emphasized that it had no reason to believe its confidential information or US national security had been compromised.
Wells Fargo maintained its Overweight rating despite the reduced target. The revised $300 target still implies approximately 68% upside from Nvidia's November 9 closing price. The board's review adds uncertainty following the recent NVDA stock selloff, when Nvidia declined despite gains across other major technology companies.
Nvidia Reports November 17 Earnings Following $96.2 Billion Prior Quarter Revenue
The conflicting signals arrive ahead of Nvidia's November 17 fiscal third-quarter earnings announcement. In its previous earnings release, Nvidia reported quarterly revenue of $96.2 billion, more than double the previous year's figure, including $89 billion from data centers. The company projected approximately $108 billion in third-quarter revenue, underscoring the scale of demand for AI computing.
Investors are increasingly concerned about China chip restrictions and whether customers can sustain their enormous infrastructure spending commitments. Broader weakness in AI stocks has also made investors more sensitive to risks that previously received less attention.
FAQ
What did Bank of America and Wells Fargo do to Nvidia stocks on November 10?
Bank of America removed Nvidia from its highest-conviction US 1 List while maintaining its Buy rating and $350 price target. Wells Fargo cut Nvidia's price target from $315 to $300 while maintaining its Overweight rating. Both actions occurred on November 10 following a trading session in which NVDA fell 4.27% to $178.67.
Why did Wells Fargo reduce Nvidia's price target?
Wells Fargo cited uncertainty surrounding CEO Jensen Huang and the potential consequences of ongoing investigations. The decision follows Nvidia's November 8 board announcement confirming an independent investigation into reports that Huang had been targeted by a foreign intelligence operation. The company stated it had no reason to believe its confidential information or US national security had been compromised.
When does Nvidia report its next earnings?
Nvidia reports its fiscal third-quarter earnings on November 17. In its previous earnings release, the company reported quarterly revenue of $96.2 billion, more than double the previous year's figure, and projected approximately $108 billion in third-quarter revenue.
