Bernstein Cuts Nvidia to Market Perform, Slashes Price Target to $200 and Warns Against Dip Buying
Summary
- Bernstein said it downgraded Nvidia's investment rating from Outperform to Market Perform.
- It sharply cut Nvidia's price target to $200 from $400, while saying the growth outlook for its data-center business remains solid.
- The stock's decline has made its valuation attractive, but Bernstein said investors should be cautious about buying the dip because of management and business risks tied to CEO Huang and broader uncertainty.
Forecast Trend Report by Period
Bernstein has downgraded Nvidia and sharply cut its price target on the stock.
BlockBeats and other outlets reported on November 12 that Bernstein lowered its rating on Nvidia to Market Perform from Outperform. The firm also cut its price target to $200 from $400.
Stacy Rasgon, an analyst at Bernstein, said the downgrade was not driven by weakening business fundamentals. Nvidia's data-center business still has a solid growth outlook. But controversy surrounding Chief Executive Officer Jensen Huang has made it harder to assess future management and business risks, he wrote.
Bernstein said the recent share-price decline has brought Nvidia's valuation to an attractive level. Even so, the firm said it is too early to conclude that negative developments have been fully reflected in the stock. It also cited uncertainty around succession and the transfer of management control as a risk if Huang steps down.
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul