"If Jensen Huang leaves, it would mark the end of an era": One sentence from Citi cuts NVIDIA Corporation (NVDA.US) valuation by 20%

In a latest research report released by Citi on November 12, the target price for NVIDIA Corporation (NVDA.US) was cut from US$285 to US$225, a reduction of 21%, while the "Buy" rating was maintained. What crushed the valuation was not chip demand, but the leader. According to media reports on November 11, the NVIDIA Corporation board is discussing the future of CEO Jensen Huang. There had previously been allegations that he was under investigation over a relationship with a NVIDIA Corporation executive, and together with an earlier review involving a suspected intelligence-related relationship, this has made his situation more sensitive. Citi stated bluntly that if Jensen Huang is forced to leave, it would mark the end of an era. In Citi's view, if Jensen Huang is forced to leave, it would mark the end of an era. During his leadership, NVIDIA Corporation became the dominant force in AI infrastructure, the most direct beneficiary of the global AI spending cycle, and one of the highest-market-cap companies in the world. This influence is not conferred by the position, but is embedded in strategic judgment, product vision, customer relationships and investor confidence. For this reason, Citi believes a leadership transition would put sustained pressure on the share price. The report expects that while the board evaluates external candidates, Chief Financial Officer Colette Kress may serve as interim CEO. But even an external candidate with outstanding credentials would find it difficult in the short term to replicate Jensen Huang's ability to rally the supply chain and customers. In Citi's framework, the key is not only "whether there will be a change of person," but also "how long the uncertainty will last." From board deliberation and the search for external candidates to the formal handover, every step lengthens the pressure period. For a company that locks in customers through multi-year roadmaps, the period of ambiguity is itself a cost. The more realistic impact is on the customer side. Procurement decisions by hyperscale cloud providers are usually tied to multi-year compute roadmaps, and personnel changes may cause some orders to revert from "commitment" to "observation." Such delays will not immediately show up in financial reports, but often show up first in valuation multiples. The valuation move also confirms this: US$225 corresponds to about 15 times FY2027 price-to-earnings, a discount of about 20% to the stock's one-year average. This discount is the price paid for uncertainty about "the person." The reason Citi still gives a "Buy" rating is that the share price has already fallen to about 11 times, comparable to the bottom of the previous cycle, and much of the bad news has been digested. It should be noted that the relevant allegations are still under investigation and no conclusion has been reached, but the market never waits for conclusions. For a company with a market value of US$4 trillion that is regarded as a bellwether for AI trades, any disturbance in governance will be magnified into a valuation issue. Thus the question is split into two halves: Is AI demand still there? Citi says yes. Is Jensen Huang still there? The models cannot calculate that. The former determines how much the company is worth; the latter determines how much the market is willing to pay for it.