Investment research firm Wedbush says Nvidia can still beat Wall Street's expectations when it reports fiscal third-quarter results after markets close on Nov. 17, even as investors adjust to life after CEO Jensen Huang's resignation. But the firm simultaneously cut its price target on the stock, signaling that the bigger question isn't near-term demand for AI chips—it's what investors will pay for that growth during a leadership transition.
In a client note, Wedbush penciled in fiscal third-quarter revenue of $113–115 billion, above Nvidia's own forecast of $108 billion (plus or minus 2%) and the FactSet consensus of $108.72 billion. The firm also thinks fiscal fourth-quarter guidance could land at $124–130 billion, arguing that Nvidia has historically left "wiggle room" in its outlook that can set up a "beat and raise" pattern—where the company tops estimates and lifts its forecast, often boosting the stock.
Why the price target dropped
Wedbush cut its price target to $275 from $345, a move that might seem contradictory given the upbeat revenue outlook. But the lower target reflects a "transition risk" discount, not a downgrade of the underlying sales picture. In plain English: Nvidia could deliver a strong quarter and even raise guidance, but the stock's reaction may be capped if investors decide each dollar of future revenue deserves a lower valuation while a new CEO story gets written.
That's why, even with upbeat forecasts, the focus can quickly turn from "did Nvidia beat?" to "how much confidence does the market have in the strategy without Huang?" The leadership change has already rattled markets, as seen in futures staying in check and European stocks slipping on the news.
Big Tech spending remains a tailwind
Wedbush pointed to ongoing Big Tech spending as a key support for Nvidia. Microsoft, Alphabet, Amazon, and Meta Platforms together spent $202 billion on capital expenditures in the third quarter and signaled more to come. Wedbush expects that spending to keep directing a large share of AI infrastructure budgets toward Nvidia in the next few quarters.
That spending is the engine behind Nvidia's booming data-center business, which has made the company one of the most valuable in the world. The AI chipmaker's products are the backbone of the generative AI boom, powering everything from chatbots to cloud computing. For everyday investors, Nvidia's earnings are often seen as a barometer for the entire AI trade—a sector that has driven much of the market's recent gains.
What it means for investors
Wedbush's $275 target shifts attention from the Nov. 17 revenue print to what multiple Nvidia gets during a leadership handoff. A lower price target alongside higher revenue expectations is a clue that the firm is applying a discount for uncertainty, not questioning the demand for AI chips.
For investors, this means the stock's reaction to earnings could hinge less on the numbers themselves and more on how the company addresses the leadership transition. Will the new CEO articulate a clear strategy? Will Huang's departure affect customer relationships or product roadmaps? These are the questions that could determine whether Nvidia's stock rises or falls after the report.
The leadership change has already had ripple effects across markets, with emerging markets feeling the impact and a prominent investor trimming his stake. Meanwhile, regulatory scrutiny continues, with the DOJ staying silent on reported antitrust probes.
Wedbush's view suggests that the AI trade isn't over—demand remains strong, and Big Tech's spending spree shows no signs of slowing. But the valuation question is now front and center. Investors may need to weigh Nvidia's growth potential against the risks of a leadership transition, and that could keep the stock's upside in check even if the company delivers another blowout quarter.
As always, no single analyst's view is definitive. But Wedbush's note highlights a key tension: the company's fundamentals look solid, but the market's perception of its future is now clouded by uncertainty. For everyday investors, the takeaway is to watch not just the earnings numbers, but also the tone of the conference call and any signals about the leadership transition.
