Key takeaways
- Bank of America removes Nvidia from its highest-conviction list
- Wells Fargo cuts Nvidia's price target from $315 to $300
- Both banks maintain bullish ratings despite growing uncertainty
Nvidia (NASDAQ: NVDA) is facing renewed scrutiny from Wall Street after Bank of America removed the chipmaker from its highest-conviction stock list, while Wells Fargo reduced its price target to $300 from $315 amid concerns about leadership uncertainty.
The November 10 decisions follow a difficult trading session in which NVDA fell 4.27% to $178.67, extending its recent decline even as other technology stocks recovered.
However, neither bank abandoned its bullish outlook. Bank of America maintained its Buy rating and $350 price target, while Wells Fargo retained an Overweight rating, highlighting a growing distinction between Nvidia's long-term earnings potential and immediate investment risks.
Bank of America Removes Nvidia, Micron and Lam Research
Bank of America removed Nvidia, Micron Technology (MU) and Lam Research (LRCX) from its US 1 List, which consists of selected investment ideas drawn from the bank's Buy-rated US stocks.
All three chipmakers retained their Buy ratings, meaning the change represents a reduction in their preferred-list status rather than a formal downgrade.
The bank did not publicly disclose a specific reason for the removals in the available reporting.
The decision follows a sharp semiconductor valuation reset, during which investors reduced the earnings multiples they were willing to pay despite continued demand for advanced computing infrastructure.
Bank of America's semiconductor research indicates that the sector has experienced an approximately 37% correction, leaving chip stocks trading near 13.7 times forward earnings.
That represents a roughly 22% discount to the broader S&P 500, reflecting the technology sector's declining valuation premium.
Wells Fargo Cuts Nvidia Target as Leadership Risks Grow
Wells Fargo separately lowered its Nvidia price target by approximately 4.8%, from $315 to $300, citing uncertainty surrounding CEO Jensen Huang and the potential consequences of ongoing investigations.
The decision follows Nvidia's November 8 board announcement confirming an independent investigation into reports that Huang had been targeted by a foreign intelligence operation.
The company emphasized that it had no reason to believe its confidential information or US national security had been compromised.
The board's review adds uncertainty following the recent NVDA stock selloff, when Nvidia declined despite gains across other major technology companies.
Nevertheless, Wells Fargo maintained its Overweight rating and expects continued growth in Nvidia's AI infrastructure business.
Its revised $300 target still implies approximately 68% upside from Nvidia's November 9 closing price, while Bank of America's $350 objective implies nearly 96%.
Nvidia Earnings Could Determine the Next Major Move
The conflicting signals arrive ahead of Nvidia's November 17 fiscal third-quarter earnings announcement.
In its previous earnings release, Nvidia reported quarterly revenue of $96.2 billion, more than double the previous year's figure, including $89 billion from data centers.
The company projected approximately $108 billion in third-quarter revenue, underscoring the scale of demand for AI computing.
Still, investors are increasingly concerned about China chip restrictions and whether customers can sustain their enormous infrastructure spending commitments.
Broader weakness in AI stocks has also made investors more sensitive to risks that previously received less attention.
