Citi and Wells Fargo Cut Nvidia Targets a Week Before Earnings as Huang Inquiry Weighs

Citi cut its target to $285 from $315 and reiterated its buy rating. "We expect Nvidia to reiterate its prior FY28E (CY27E) revenue outlook of 70% Y/Y growth," the bank's analysts wrote, according to CNBC. Wells Fargo trimmed its target to $300 from $315 and kept an overweight rating. According to Investing.com, the bank pointed to the investigations into Huang and key person risk as an overhang on the stock, and said its new target equals 15 times its calendar 2028 earnings-per-share estimate.

The revisions are about what the shares are worth rather than what the business will earn. Wells Fargo's forecasts for the coming quarter sit above Wall Street's. It expects Nvidia to guide fourth-quarter fiscal 2027 revenue to $126.4 billion, against a consensus of $124.3 billion, which it attributed to strong supply execution, and it models earnings per share of $2.77 against a consensus of $2.73. It expects a gross margin of 72.3% after price increases; Nvidia has previously said memory costs would push the margin to a low of 71% to 72% in that quarter before it settles at 72% to 73% in fiscal 2028. Wells Fargo also expects heavy share buybacks after a $150 billion expansion lifted Nvidia's total authorisation to $235 billion.

The bank sees AI infrastructure capacity of more than 4 gigawatts shipped in the third fiscal quarter, up from about 3 gigawatts a quarter at the end of fiscal 2026, and models about 23 gigawatts for fiscal 2028. "We view supply-side production capacity scaling & visibility into CY28+ demand as key topics," its analysts wrote, according to CNBC.

Nvidia closed Monday at $178.67, down $7.97, and has fallen 13.6% over the past week, Investing.com reported. The new Citi and Wells Fargo targets sit roughly 60% to 68% above that close. By 24/7 Wall St.'s calculation, Monday's decline cut the value of Huang's own stake of about 811.5 million shares by $6.47 billion.

Other analysts have held their ground. Morningstar kept its $310 fair value estimate but added the investigations and espionage to the risks it lists for the stock, and Wedbush analyst Dan Ives put the chance of Huang leaving the company at about 15%, according to 24/7 Wall St.

Nvidia's board opened its inquiry on Sunday and has said it has confidence in Huang. Citi noted the company's statement that Huang "will remain CEO while the investigation proceeds." President Donald Trump has said the FBI "is looking into" Huang. Separately, a shareholder filed a proposed class action in federal court in San Francisco on Monday over Nvidia's statements about its dealings with Megaspeed, a customer based in Singapore.

Nvidia said in an October 28 notice that it will host its earnings call at 2 p.m. Pacific time on Tuesday, November 17, covering the quarter that ended October 25. Chief financial officer Colette Kress's written commentary is due to be posted to the company's investor site shortly before the call, when analysts are likely to press management on the investigation as well as on supply and demand.