Nvidia saga: Two affairs, $1.58 tn wiped out in 26 sessions; CEO Jensen Huang in a soup

It took 26 sessions and romance in the air for Nvidia to lose a whopping $1.58 trillion in market capitalisation (m-cap), as a fresh controversy looms over CEO Jensen Huang following his admission of a second affair. The Santa Clara-headquartered chipmaker giant, which spearheaded the global artificial intelligence (AI) race and became the first publicly listed company to hit the $5 trillion mark in October 2025, is facing steep target cuts of up to 60 per cent from brokerages such as Bernstein, Argus Research and Baird, amid reports that the chipmaker is preparing to oust Huang.

From a market capitalisation of $5.76 trillion on October 6, Nvidia has lost $1.58 trillion in value, taking its valuation to $4.18 trillion as of November 12. This, in fact, does not include the 8.61 per cent plunge the stock witnessed in post-market trade after a Bloomberg report suggested that Nvidia was in the process of naming a temporary chief and searching for a permanent one, as one of Huang's affairs was linked to a woman suspected of being a Chinese spy.

Bernstein became the second brokerage in as many days to downgrade Nvidia, saying it had "had enough". The brokerage cut its target on Nvidia to $200 from $400 earlier. Baird had earlier downgraded the stock to 'Neutral' from 'Outperform' on Wednesday, slashing its target to $200 from $500.

“Our gut tells us that we probably haven’t yet fully probed the depths of what might be found here,” Bloomberg quoted analyst Stacy Rasgon as writing in a note to clients late Wednesday. “We’ve had enough, and prefer to watch from the sidelines.”

Baird analyst Tristan Gerra said the brokerage was taking a more cautious stance until uncertainties surrounding potential US government action following the upcoming congressional hearing are resolved, US investigations reach their conclusions, the revenue impact of potential near-term risk-channel adjustments and charges is quantified, and uncertainties around Huang's tenure as CEO are cleared.

AI hyperscaler capex could slow to 40 per cent growth or slightly less in 2027, Baird warned, as it cut its target on Nvidia. The revised target still suggested potential upside of 18.48 per cent over the prevailing price of $168.80 per share.

In a November 9 note, Shriram Finance noted that chip and material providers to data centres, including Nvidia, have been broadly repriced amid discussions around the moratorium narrative emerging from Texas. This follows the US election outcome, which saw a Democratic sweep and raised questions over the AI buildout.

Shriram Finance said markets used the Texas results as a signal of the regulatory outlook for US data-centre construction as a whole. This points to the 2028 channel, with the multi-year physical buildout being repriced for the risk of a less supportive regime after 2028.

Nomura feels a federal AI data-centre moratorium is unlikely, but a "temporary pause" at the state level is possible. It said mainstream Democrats are not opposed to AI itself.

In Texas and Georgia, candidates who campaigned on a "temporary pause" won, while in Ohio, candidates from both parties backed conditional approval. No governor-elect in major data-centre states has pledged a permanent ban; permanent bans exist only in some local ballot measures, Nomura said.

Nvidia's downgrade comes as 2027 data-centre forecasts are being delayed amid a recent lack of visibility. This could accelerate the reverse AI trade, which has benefited India of late, with foreign inflows touching Rs 60,698 crore in November so far.

Supply issues are largely behind the potential downside, alongside softening demand, Baird reportedly said.

"While H300 lead times remain stretched and demand well exceeds supply, timing risks exist around potential pre-emptive order cuts from risk channels, with exposure estimated at 10-30 per cent. Finally, uncertainties related to CEO tenure into 2027 also support our trading range views on the stock near term. Neutral-rated," Baird reportedly said.