Nvidia Shares Slump Following CEO Jensen Huang's Resignation Amid Security Scrutiny

Nvidia shares have plummeted nearly 20% this month, sitting 32% below their record high, following the abrupt resignation of co-founder and CEO Jensen Huang on Thursday, Oct. 12. The departure came after a board investigation into revelations of extramarital affairs, including a relationship with a businesswoman suspected by U.S. intelligence officials of spying for China. Longtime CFO Colette Kress has been appointed interim CEO.

The sudden leadership void has triggered drastic revisions from several Wall Street analysts. Bernstein's Stacy Rasgon cut his price target in half to $200 per share, while Melius Research's Ben Reitzes lowered his target to $185. Blair's Tristan Gerra reduced his target to $200, and Evercore's Mark Lipacis slashed his target to $186 from $465, pointing to the lack of an obvious operational successor and a potential cooling of the artificial intelligence infrastructure boom.

Conversely, other analysts maintained their previous stances. Raymond James analyst Simon Leopold kept a strong buy rating and a $515 target, and Wedbush's Matt Bryson maintained a $345 target, arguing that strong demand and cheap valuations already reflect current uncertainties. Meanwhile, UBS analyst Timothy Arcuri kept his $300 target but warned that national security ramifications could invite tighter government export controls in regions like Singapore and Malaysia.

Despite significant price target reductions, Nvidia's median target price sits at $277.50 per share, offering a potential upside from its trading price around $163. The semiconductor company currently trades at roughly 12 times forward earnings, marking its cheapest valuation in 15 years.

What to watch next: Monitor the board's search for a permanent CEO and any potential regulatory updates regarding U.S. export controls on semiconductors.