Nvidia (NASDAQ:NVDA), an AI accelerator, graphics processor, and data-center networking solutions provider, closed at $162.85, down 2.01%. HSBC downgraded the stock to hold, and investors are watching the earnings call on Nov. 17.
Trading volume reached 360.7M shares, coming in about 15% above its three-month average of 144.3M shares. Nvidia IPO’d in 1999 and has grown 396,931% since going public.
How the markets moved today
The S&P 500 (SNPINDEX: ^GSPC) fell 0.41% to 7,561, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) dropped 0.90% to 25,139. Among semiconductor peers, Advanced Micro Devices closed at $534.06, down 8.75%, and Broadcom closed at $347.01, down 4.76%, as AI hardware names faced a weaker session.
What this means for investors
The fallout from former Nvidia CEO Jensen Huang’s resignation continues amid HSBC’s downgrade.
HSBC analyst Frank Lee not only downgraded the chip stock to a hold but also cut its price target from $375 per share to $170, just 4% above Friday’s closing price. Lee believes the stock will struggle until Nvidia names a permanent CEO.
However, the second reason for the HSBC downgrade is likely less obvious to most investors. About 11% of Nvidia’s revenue over the last six quarters came from outside the U.S. and Taiwan. Lee believes these revenue streams could face more stringent export rules, further pressuring the company’s earnings.
Regardless of that possible concern, investors and analysts alike seem to be writing off Nvidia stock. Consequently, all eyes are likely to be on Nvidia’s upcoming earnings report for the third quarter of fiscal 2027. That takes place on Nov. 17 and will be the first without Jensen Huang.
Although the company should continue to deliver rapid revenue and earnings growth, investors will more likely focus on the conference call and hints about the company’s future. Amid that uncertainty and the dramatically lower price target, current shareholders are likely best off following HSBC’s advice and treating this as a hold until further information comes to light.
Should you buy stock in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $338,083!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,021,163!*