Buy, Sell Or Hold Nvidia Stock At $156?
More on the AI trade: our AI storyline page collects our pieces on AI stocks.
The stock alert on your phone this morning probably named one company. Nvidia traded at $155.90 premarket Thursday (8:52 am ET), down 10.3%, as the company announced that CEO Jensen Huang had resigned, effective immediately, a day after the Wall Street Journal reported its board was preparing to oust him. Finance chief Colette Kress is interim CEO while the board searches for a permanent one. The stock is 35% below its Oct 6 peak of $239.24.
Start with what is not falling. Since the Nov 6 close Nvidia is down 16.5%, while AMD is up 26.4%, Broadcom 20.6% and the chip ETF SMH 5.5%. Buyers of AI chips have not stopped; the market is marking down a CEO, not demand, at least so far.
Nvidia’s own long record leans the same way. Since 2003 it has had 41 days when it fell 5% or more while the S&P 500 index held steady (down less than 0.5%, or up), Tuesday among them. In 32 of the 40 earlier ones it was back above the pre-drop close within three months.
That rebound usually came after a further dip. For families with seven figures invested, Nvidia sits in index, tech and AI funds at once. Would your plan survive another 15%? A Trefis partner firm can test it with you in a free 15-minute call.
What Does Each Call Rest On?
| Call | The case in one line | The number behind it |
|---|---|---|
| Buy | Cheap if earnings arrive | About 10x next year’s estimated earnings |
| Hold | Nvidia-only drops usually fade | 3M median +10.2%; 12M +48.3% |
| Sell | CEO exits usually lag | 3 of 10 beat the S&P in 12M |
Buy: analysts expect $15.81 a share next fiscal year; $155.90 ÷ $15.81 ≈ 10x. Hold: after the 40 earlier Nvidia-only shock days since 2003. Sell: 10 big-company CEO exits; over 12 months the median stock fell 10.5% and 7 of 10 trailed the S&P 500.
The catch is timing. After Nvidia’s 14 earlier 15%-plus weeks since 2003, the typical path fell another 17.0% within three months, about $129 from here, yet a year later the median was +55.0%, higher in 11 of 14. The three exceptions came in 2003 and 2008. The CEO-exit record is the real risk: the year after followed the product, as we laid out in What Happens To Nvidia Stock Without Jensen Huang? Nvidia reports on Nov 17.
Hold. Add only at a price written down in advance, such as near $129, and size Nvidia, AMD, Broadcom and your AI funds as one band, not five bets. What would change it: a sales or guidance cut on Nov 17 makes the sell case, with the floor we set out in Nvidia Stock To $129?; a smooth hand-off under Kress with orders intact makes a rebound the likelier path.
For education, not a recommendation to buy or sell.
What Should You Ask Next?
- Will Nvidia Stock Go To $100? What would have to break for the bad case.
- How much of your money is in AI, counting every fund?
Would Your Plan Survive The Dip First?
The typical path after a week like this fell another 17.0% before it recovered. For families with seven figures invested, a stress test of your AI holdings takes a free 15-minute call with a Trefis partner firm.
For questions about this article or underlying research, email help@trefis.com.