Nvidia Shares Slip 2% Following HSBC Downgrade and CEO Uncertainty

Nvidia shares fell 2.01% to settle at $162.85 during a weaker trading session for semiconductor stocks, accompanied by heavy volume that reached 360.7 million shares, about 15% above its three-month average. The broader market also saw declines, with the S&P 500 slipping 0.41% to 7,561 and the Nasdaq Composite dropping 0.90% to 25,139. Other chipmakers faced steeper drops, as Advanced Micro Devices fell 8.75% to $534.06 and Broadcom lost 4.76% to $347.01.

The downward pressure on Nvidia follows the departure of former CEO Jensen Huang. HSBC analyst Frank Lee downgraded the artificial intelligence hardware provider from a buy equivalent to a hold and sharply reduced the price target from $375 to $170 per share, leaving it roughly 4% above the previous close. According to the analyst, the equity may face headwinds until a permanent chief executive is appointed.

Beyond leadership questions, the downgrade points to regulatory risks. Approximately 11% of the company's revenue over the preceding six quarters originated outside the United States and Taiwan, creating vulnerability to potential tighter export controls that could weigh on future earnings.

Investors are now turning their attention to the upcoming third-quarter fiscal 2027 earnings call scheduled for November 17, which will mark the first financial reporting event without Huang at the helm. Market participants will listen closely to management commentary for clarity on executive succession and strategic direction.

What to watch next: Monitor Nvidia's upcoming November 17 earnings report and conference call for updates regarding a permanent CEO and potential export regulation impacts.