Nvidia Stock At 15-Year-Low P/E: Buy The Dip Or Wait Out The Jensen Huang Scandal?

Nvidia Corp. is trading at its cheapest forward earnings multiple in about 15 years, as the chipmaker's board weighs whether to remove co-founder and Chief Executive Officer Jensen Huang following reports of two extramarital affairs.

The stock fell 5.4% to $164.35 in early pre-market trade in New York on Thursday, after touching $156.20 overnight, its lowest level since July 2025. It had closed at $173.73 on Wednesday.

Measured from its record close of $239.24 on Oct. 6, Nvidia has shed roughly $2 trillion in market value. That is more than the entire market capitalisation of Meta Platforms, Broadcom or Tesla.

The troubles for Nvidia compounded late on Wednesday, after the New York Times reported that Huang also had a relationship with Kimberly Powell, Nvidia's vice president of health care, who reports directly to him. The Wall Street Journal later reported that the board was preparing to oust Huang, and other publications confirmed the board met on Wednesday to discuss his future.

Brokerages Step Back

Three major brokerages stepped back from the stock within two days. Bernstein downgraded Nvidia to 'market perform' from 'outperform' and halved its price target to $200 from $400. Analyst Stacy Rasgon kept his earnings estimates unchanged, saying AI demand remains very strong, and instead cut the multiple he is willing to pay to about 12.7 times fiscal 2028 earnings.

In its note, Bernstein said the second allegation made it very difficult to see the board keeping Huang in the role, and cautioned that more allegations could surface.

"Jensen is Nvidia, right? He is the visionary," Rasgon told CNBC, adding that he did not intuitively know who could make the company's decisions for the next 10 years.

Baird cut Nvidia to 'neutral' and lowered its target to $200 from $500, citing uncertainty over Huang's tenure, pending US government investigations and limited visibility on 2027 spending. Morgan Stanley removed Nvidia from its list of top picks, though analyst Joseph Moore retained his 'overweight' rating and $300 target.

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Several Wall Street analysts told CNBC the stock could fall another 20% if Huang is removed. Longtime Nvidia bull Dan Ives also turned cautious on Huang's prospects, writing that "the writing is on the wall that Jensen's days at Nvidia could be numbered". Ives sees the stock at $300 if Huang stays and $225 if he is ousted.

The Long-Term View

The case for buying the dip rests largely on valuation.

Nvidia's 12-month forward price-to-earnings ratio stands at about 11.7 times, its lowest since October 2011, according to FactSet data. The S&P 500 trades at about 18 times forward earnings. Estimates vary by data provider, with Mizuho Securities' Jordan Klein putting the multiple below 10 times, and describing the stock as "silly cheap" in an interview with CNBC. Klein said multiples that low are usually seen at companies with structural problems or businesses in long-term decline, and Nvidia is neither.

The growth numbers back that argument. Nvidia's revenue rose 106% year-on-year to $96.2 billion in the second quarter of fiscal 2027, with data centre revenue up 117% at $89 billion, according to the company. It has guided for third-quarter revenue of $108 billion, plus or minus 2%. Results are due on Nov. 17.

Even Bernstein acknowledged in its downgrade note that the business fundamentals remain intact and that a great deal of bad news is already priced in.

Raymond James has kept its 'strong buy' rating. Analyst Simon Leopold wrote that he doubts the CEO's conduct alters the fundamentals, and argued the company is bigger than any one executive, reports said.

Shay Boloor, chief market strategist at The Futurum Group, told Yahoo Finance that demand for Blackwell chips, the Rubin roadmap and the CUDA software ecosystem were established well before the scandal, and that he does not expect the next 12 to 18 months of revenue to vanish if Huang leaves.

Patrick Moorhead of Moor Insights & Strategy said a change at the top poses little short-term risk because Nvidia's product roadmap is set for years. Over the longer term, though, he flagged execution risk, given that the company has no planned successor and its structure is built around Huang.

The 61 analysts tracked by TIKR had an average price target of $326 as of Nov. 10, before the latest round of downgrades.

For now, the Wall Street's message is to expect more volatility until the leadership question is settled, while the valuation offers a cushion for investors with a longer horizon.

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