Oppenheimer Downgrades NVIDIA to Perform

Oppenheimer analyst Rick Schafer downgraded NVIDIA (NASDAQ: NVDA) from Outperform to Perform.

“We are downgrading shares of NVDA and removing our price target following reports (WSJ, NYT) of founding CEO Jensen Huang’s imminent departure amidst allegations of a 2nd extramarital affair. Credible media reports circulated Wednesday evening that NVDA’s board is preparing to part ways with Huang following a widely reported relationship with an alleged Chinese spy compounded by new allegations of a relationship with an NVDA executive.

This “one-two” punch appears to have forced the board’s hand. Huang’s role as the “face of AI” cannot be overstated. His uniquely skillful, forward-thinking, steady and tireless leadership has been critical to NVDA’s success in becoming the undisputed AI leader and world’s largest company.

Huang is a hands-on leader with dozens of direct reports. We believe he is deeply involved in all strategic decision making. We see massive shoes to fill and no obvious successor. His departure presents a material, potentially thesis-changing event.

NVDA boasts an incredibly deep bench of talent. We see risk that a Huang departure creates a “brain drain” situation at the AI giant, threatening NVDA’s pace of innovation—a critical competitive advantage. NVDA reports earnings Tuesday (11/17).

While we see upside to the F3Q (Oct.) print and F4Q (Jan.) outlook, we expect fundamentals to take a backseat near term. The departure of Mr. Huang could, in our view, translate to a lingering share overhang. We are maintaining our CY26/27/28E EPS as we contemplate any future impact on the outlook.

Within our coverage perceived beneficiaries of any NVDA dislocation include AMD, MRVL and AVGO.”

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.