Nvidia falls to its lowest valuation in 14 years! "Super bull" Tom Lee calls for bottom fishing, retail investors are buying more as it drops, but Wall Street is divided

Nvidia's share price suffered a sharp decline, with its forward P/E ratio dropping to about 12x, the lowest level since 2012. However, this historic low valuation did not lead to a unanimous bullish view on Wall Street. With the departure of founder and CEO Jensen Huang, market confidence in the AI chip giant is becoming clearly divided.

On Thursday, Nvidia’s shares plunged over 14% in early trading, then gradually recovered some of the losses thanks to emergency PR efforts and dip buying, ultimately closing down 4.34% at $166.19. Compared to its recent high of $243.37 on October 6, the stock is down over 30% in total.

Amid the sharp price drop, retail investors stepped in to bottom fish aggressively. Data from Vanda Research shows that in the first half-hour after the market opened Thursday, retail investors’ net purchases of Nvidia reached $111 million, a record for this time window. Well-known bulls such as Tom Lee from Fundstrat Global Advisors and Paul Meeks from Freedom Capital Markets also publicly called for buying, believing that the current valuation is attractive.

On the other hand, some Wall Street institutions are retreating. Bernstein downgraded Nvidia from Buy to Market Perform, slashing its price target from $400 to $200; while Goldman Sachs maintained its Buy rating, it cut the target from $300 to $220. Famous short seller Michael Burry further warned that Nvidia bulls should consider using the next earnings window to exit quickly.

The focus of this bull-bear game is no longer just on the sustainability of AI chip demand, but whether Nvidia can maintain its original technological leadership, organizational efficiency, and the AI industry financing ecosystem built under Jensen Huang’s leadership after his departure.

Retail Investors Set Record for Dip Buying as Tom Lee and Other Bulls Openly Advocate Buying

On Thursday, Nvidia's share price briefly fell to $148.80 in early trading, down more than 14% from the previous close and below the 52-week low of $164.27. The stock gradually rebounded, ultimately closing down 4.34% at $166.19. Although the loss narrowed, the stock is still down about 32% from its all-time high of $243.37 on October 6.

The sharp decline sparked a buying frenzy among retail investors. According to Vanda Research, retail net purchases of Nvidia reached $111 million in the first half hour after Thursday's opening—the highest on record for this time slot.

Data from Fidelity Investments showed that as of noon Eastern Time on Thursday, clients had submitted 394,818 buy orders for Nvidia, versus only 80,088 sell orders. The volume of buy orders was more than double the combined total buy orders for stocks ranked second to tenth in trading volume on the platform that day.

Prominent investors also expressed their bullish stance at this time. Tom Lee from Fundstrat Global Advisors and Paul Meeks, head of technical research at Freedom Capital Markets, both voiced optimism about Nvidia. Meeks believes the current valuation is unreasonably low and stated he will buy aggressively.

Mark Hackett, Chief Market Strategist at Nationwide Financial, noted that investors’ repeated bottom fishing has become habitual—each successful dip buying further reinforces the behavior. He also pointed out that the long-term outlook for AI remains positive.

Valuation Falls to 14-Year Low, Orders Extended Through 2028 Provide Support

The core logic supporting the current dip-buying view is that Nvidia’s order visibility, product roadmap, and profitability have not changed materially with the stock price drop.

Piper Sandler analyst David O'Connor maintained his Overweight rating with a $300 target price. He noted that Nvidia’s 2027 orders are already sold out and 2028 is almost fully booked, with discussions with clients now focused on 2029 and beyond. Wolfe analyst Chris Caso also believes that at least until 2028, Nvidia’s fundamentals and profitability will not be significantly impacted.

RBC estimates that current chip demand exceeds supply by around 50%; JPMorgan points out that the ramp-up trajectories for follow-up products like Vera Rubin, Rubin Ultra, and Feynman are already clear.

Latest quarterly results provide further support for this outlook: Nvidia’s revenue reached $96.2 billion, up 106% year over year; data center revenue grew 117% to $89 billion, and the company guides for next quarter’s revenue of about $108 billion.

What’s drawing even more investor attention is the valuation. With the continuous pullback in share price, Nvidia’s forward P/E has fallen to about 12x, its lowest since 2012. Depending on different institutions’ earnings projections, its estimated P/E for fiscal 2027 is about 10x, and only around 7x for 2028 consensus earnings.

Raymond James maintains a Strong Buy rating and a $515 target price, saying Nvidia’s fundamentals have hardly changed and its stock is now in oversold territory.

However, the market’s bullishness on Nvidia is not unanimous. According to TipRanks data, 10 of 27 analysts still maintain a Hold rating, with an overall rating of “Moderate Buy” and an average price target of about $257. The average target price among 14 investment banks is about $260.

Wall Street Begins Repricing: Downgrades and Target Cuts Appear

In contrast to some investors actively bottom fishing, more Wall Street institutions are now pricing in the uncertainty brought by Jensen Huang’s departure into Nvidia’s valuation.

Bernstein analyst Stacy Rasgon slashed the price target from $400 to $200. He believes Nvidia’s problems may extend beyond those that have already surfaced, using the analogy “finding two ants in the kitchen” to suggest there may be more issues yet to emerge.

Goldman Sachs analyst James Schneider maintained a Buy rating but cut the price target from $300 to $220. Significantly, Goldman did not reduce its earnings forecast per share but compressed the valuation multiple from 30x to 22x to reflect uncertainty during the leadership transition.

Noted short seller Michael Burry is even more pessimistic. He acknowledges that mechanical buying from index funds and retirement accounts helped Nvidia absorb some selling pressure, but believes the real business impact of Huang's departure may take longer to manifest. He warns that Nvidia bulls may still see an even better opportunity to exit, stating bluntly: "Nvidia longs will have one more great chance to exit. Exit."

Burry also questioned the company’s succession planning: around 60 executives report directly to Jensen Huang, yet there is hardly an obvious internal successor.

There is also disagreement among institutions on where the share price bottom lies. Cantor, Piper, KeyBanc, and Citi all see the $150 level as a reasonable support zone, corresponding to about 9–11x 2027 expected EPS. RBC’s downside scenario puts it as low as $100—about 6x 2027 expected EPS, below Nvidia’s valuation low point for the past five years.

Jensen Huang Leaves Two Major Questions: Management Structure and Financing Ecosystem

Compared with short-term orders and profitability, the long-term impact of Jensen Huang’s departure on Nvidia’s competitiveness is harder to quantify. The main issues relate to organizational management and industry financing.

First is the organizational structure. Seaport analyst Jay Goldberg bluntly said: “Simply put, no one can fit into Jensen Huang's leather jacket.” Wells Fargo also pointed out that the roughly 60 executives reporting directly to Huang create a flat structure that is unsustainable and difficult to replicate, potentially affecting internal coordination efficiency and product launch pace.

JPMorgan believes that while the interim management team may be able to maintain the current product roadmap in the short term, the real test in two to three years will be whether the new management can identify the next technological inflection in accelerated computing and continue building platforms and ecosystems beyond just chips.

Second is the financing ecosystem. In recent years, Jensen Huang leveraged Nvidia’s roughly $50–60 billion in free cash flow per quarter to provide funding via equity investment, asset backing, and supplier prepayments for companies like OpenAI, Anthropic, xAI, and CoreWeave.

UBS analyst Tim Arcuri sees this as one of the biggest impacts potentially arising from Huang’s departure. Even if the new leadership decides to continue a similar strategy, there may be a pause. If up to $50 billion per quarter in cash no longer flows into the AI industrial chain, the related companies' financing environment could deteriorate rapidly.

This risk comes as interest rates are rising and credit market liquidity is tightening. On the announcement day, CoreWeave shares fell more than 11% in pre-market trading, while the company was marketing an investment-grade loan of over $4 billion at that time.

Seaport also noted that a $500 billion financing platform plan involving six private equity funds previously announced by Jensen Huang has yet to be finalized in contract. Without Huang’s drive, whether this initiative can move forward remains uncertain.

Rising Regulatory Pressure and Intensifying Competition Test Nvidia’s Moat

Jensen Huang’s departure does not remove Nvidia’s regulatory pressures. The board’s independent investigation, chaired by Joon Kim of Wachtell, is ongoing, and the US Department of Justice’s Megaspeed probe is not yet concluded. The House of Representatives has called for a closed-door briefing on November 18, and Senators Warren and Coons have requested relevant records from Nvidia.

Export controls remain in focus. Goldman Sachs estimates that Nvidia’s ex-US sales exposure is about 11%; UBS believes stricter export rules could affect shipments to places like Singapore and Malaysia, putting about 10% of revenue at risk. However, Wolfe believes market concerns over export controls may be exaggerated.

Meanwhile, competitors could benefit from uncertainty facing Nvidia. BNP Paribas, Seaport, and William Blair all named AMD and Broadcom as potential beneficiaries, believing that hyperscale cloud providers and AI labs may diversify chip suppliers more proactively. BNP Paribas projects that by 2030, custom chips could account for nearly three-quarters of AI accelerator shipments.

William Blair also suggested that the competitive barrier created by the CUDA ecosystem largely comes from code migration costs, but AI coding assistants are lowering this threshold. Anthropic disclosed in its IPO roadshow that its Claude Mythos Preview model adapted to AMD's MI355X chip for prompt processing in just about three days, whereas such work used to require 6 to 12 months.

Counterpoint Research believes that Jensen Huang previously integrated the entire AI supply chain into the annual product iteration cycle. As this unified tempo potentially changes, the AI hardware industry may enter an “era of multi-speed parallelism,” requiring supply chain partners to readjust their product and investment schedules.

Succession Unresolved, Earnings Report Becomes Next Major Test

Currently, there is still no clear answer to Nvidia's CEO succession. According to an analysis released by The Action Network on November 12, internal executive Ian Buck leads with a 35.5% implied probability, interim CEO Colette Kress is second at 25.5%, Arm CEO René Haas is third at 9.1%, and AMD CEO Lisa Su has a 2.4% chance. (The estimate combines Kalshi and Polymarket prediction market prices, weighted by their historical forecast accuracy.)

Ian Buck has worked at Nvidia for 22 years, overseeing hyperscale and HPC businesses and is regarded as a core creator of the CUDA architecture. External candidates mentioned by the media include Arm CEO René Haas, AMD CEO Lisa Su, and Micron Technology CEO Sanjay Mehrotra.

Nvidia is scheduled to report its third-quarter earnings on November 17. The market will not only focus on revenue, orders, and next quarter guidance, but will closely watch how the interim leadership interprets strategy after Jensen Huang’s departure.

Mark Hackett points out that with the new management just in place, it will be difficult to gain full market trust with just one earnings call. In addition, Anthropic is expected to launch its IPO later next week, which will also serve as an important window into investment sentiment in the AI sector.

For Nvidia, orders stretching to 2028 and continued profit growth may be sufficient to support some investors' dip-buying logic for now. But what truly needs to be repriced is whether, after Jensen Huang's departure, this AI chip giant can continue to maintain its past advantages in technology, organization, and the industrial ecosystem.