Nvidia Selloff Deepens After Board Probe, Analyst Cuts
Nvidia selloff deepened after a board investigation and analyst downgrades, prompting traders to reassess near-term valuation and risk positioning.
KEY TAKEAWAYS
- Board opened an independent investigation and retained outside counsel to probe reports concerning CEO Jensen Huang.
- Baird downgraded to Neutral and cut its price target to $200 from $500.
- Two-session move erased about $470.0 billion of market value and pressured tech sector risk premia.
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Nvidia’s (NVDA) selloff intensified on November 10–11 after the company’s board launched an independent investigation and analysts cut ratings and price targets, heightening concerns about leadership, potential export restrictions, and the pace of hyperscaler artificial-intelligence (AI) spending.
Nvidia Board Investigation and Strategic Moves
On November 8, Nvidia said its board had initiated an independent investigation into reports that Chief Executive Jensen Huang was targeted by a foreign intelligence effort. Two days later, the company’s independent directors retained former acting U.S. Attorney Joon H. Kim and the law firm Wachtell, Lipton, Rosen & Katz to lead the inquiry.
Amid these developments, Nvidia announced on November 9 a strategic collaboration with Rebellions and SK Telecom to advance sovereign AI infrastructure in South Korea. The partnership involves Nvidia’s NVLink Fusion technology and Rebellions’ R200 neural-processing units.
Analyst Downgrades and Market Pressure
The selloff accelerated after Baird downgraded Nvidia to Neutral from Buy on November 11 and cut its price target to $200 from $500. The brokerage cited risks from potential U.S. restrictions on chip sales to China, uncertainty about AI infrastructure demand, and leadership concerns. Baird estimated hyperscaler AI capital expenditure growth could slow to about 40.0% year over year in 2027. It also noted that demand for Nvidia’s high-end H300 chips had exceeded supply but warned that 10.0% to 30.0% of pre-emptive orders might be vulnerable to cuts due to timing risks. Baird said shares could remain range-bound in the near term.
Morgan Stanley removed Nvidia from its Top Pick list while maintaining an Overweight rating and its 12-month price target. The firm argued that a durable AI buildout could support future share gains if power availability becomes a constraint. Other brokerages also trimmed coverage: Bank of America removed Nvidia from its U.S. preferred list, and Wells Fargo and Citigroup cut targets.
Technology shares declined on November 10 after a hotter-than-expected U.S. inflation report raised expectations for another Federal Reserve rate increase. Investors also reacted to concerns about Nvidia’s leadership and complications in an Ohio data-center project. Over two sessions, Nvidia’s stock was on track to lose more than $470 billion in market value. Meanwhile, steps by AI startup Anthropic toward a large initial public offering did not ease broader anxiety about the AI sector.
Nvidia has not disclosed any revenue impact, regulatory findings, or changes to its business outlook related to the investigation or export restrictions.
Outlook and Next Steps
Nvidia is expected to report earnings roughly one week after November 10. That filing will provide investors and analysts with the next dated milestone to assess whether the board inquiry and recent repricing materially affect the outlook for AI infrastructure spending.
