Nvidia Stock Sell-Off Deepens: Spy scandal, price target cuts put AI giant under pressure

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Nvidia shares suffer a sharp decline, losing nearly 10% in a single session as investors react to mounting concerns surrounding CEO Jensen Huang, a broader technology sell-off and uncertainty over the artificial intelligence trade. The latest losses put the c…

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Nvidia stock loses 10% as sell-off intensifies

Nvidia shares suffer a sharp decline, losing nearly 10% in a single session as investors react to mounting concerns surrounding CEO Jensen Huang, a broader technology sell-off and uncertainty over the artificial intelligence trade. The latest losses put the chipmaker under pressure just days before its quarterly earnings announcement scheduled for November 17. (Sources: Yahoo Finance, Investopedia)

Jensen Huang controversy adds to investor concerns

The sell-off intensifies following reports that Nvidia CEO Jensen Huang may have been targeted by a suspected Chinese intelligence operation involving Alice Huang, a former executive at Singapore-based data centre company Megaspeed. Nvidia's board has launched an independent investigation into the matter, although the company says it has no reason to believe that national security or its proprietary technology has been compromised.

Nvidia loses billions in market value

The latest decline wipes out hundreds of billions of dollars in Nvidia's market capitalisation, with shares falling to levels last seen in the spring. The stock is also heading towards its steepest monthly decline in years. Broader concerns about AI-sector valuations and uncertainty over future infrastructure spending add to the selling pressure.

Wall Street analysts cut Nvidia price targets

The controversy triggers a fresh wave of analyst caution. Citi lowers its price target on Nvidia to $285 from $315, while Wells Fargo cuts its target to $300 from $315. Other analysts also reassess the risks, citing leadership uncertainty and potential regulatory scrutiny. The revisions add to concerns about the stock's near-term valuation.

November 17 earnings emerge as next big catalyst

Investors now turn their attention to Nvidia's November 17 earnings announcement for clues about AI demand, revenue growth and the outlook for its data-centre business. The company's ability to reassure investors about its leadership, business operations and growth prospects could prove crucial in determining whether the stock stabilises or extends its decline.

(Disclaimer: This slideshow is based on inputs from agencies. These do not represent the views of The Economic Times)