Breaking up with Nvidia (NVDA) is hard to do. After the stock dropped 25%, two of Wall Street’s biggest banks pulled it from their top-pick lists, and neither could bring itself to say “sell” — yet.
Morgan Stanley’s version was the most polite: It’s not you, it’s our stop-loss policy. The bank removes any top pick that falls more than 25% from where it was named, and Nvidia had slid a bit more since getting the title on Oct. 2. Only a day earlier, Bank of America cut Nvidia, Micron (MU) and Lam Research (LRCX) from its US 1 List of best ideas. Both banks still rate Nvidia a Buy.
Others were less gentle. Baird cut the stock to Neutral on Wednesday and slashed its price target to $200 from $500, citing rising odds of a CEO change. Aletheia Capital downgraded Nvidia to Hold on Monday. Mizuho, Citi, and Wells Fargo trimmed their price targets in the days after reports tied CEO Jensen Huang to a suspected Chinese spy.
Still, nobody is packing Nvidia’s things into a box. Of 82 analysts who rate the stock, 77 call it a Buy, according to Bloomberg data.
The average price target sits about 87% above where the stock closed Tuesday. That’s the widest gap between the two measures in two years of monthly readings, because the stock fell and the targets mostly stayed put.
Wall Street’s reluctance to get bearish on Nvidia has history on its side, mostly.
Nvidia has closed 25% below a record 13 times since its 1999 IPO. A year later, it was higher in nine of them, according to Yahoo Finance calculations.
The exceptions were brutal. After drops in 2001, 2002, and 2007, the stock lost more than half its value again over the next 12 months. It’s also a small sample, and half of it comes from the dot-com boom and bust, when Nvidia was a fraction of today’s $4 trillion giant.
Even Bank of America’s own strategist isn’t giving up on the bigger AI story. “It’s paramount for the US to remain number one in terms of tech primacy. And that’s where I see almost a put on the … tech story,” Savita Subramanian, BofA’s head of US equity and quantitative strategy, told Yahoo Finance on Tuesday — though she didn’t discuss the list change itself.
Analysts have been right lately. Every average target set from November 2024 through November 2025 was reached within a year, according to Yahoo Finance analysis of Bloomberg data.
And Nvidia is no longer priced for perfection. It trades at about 11 times next fiscal year’s expected earnings, per Yahoo Finance calculations, versus about 18 times for the S&P 500 (^GSPC), according to FactSet.
