Ryan Vanzo, The Motley Fool Fri, November 13, 2026 at 2:37 PM EST 5 min read NVDA -2.55% GOOGN -0.91% META +2.69% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Nvidia (NASDAQ: NVDA) shares currently face a litany of headwinds.
The first challenge has been a correction across AI stocks. Not every AI stock has been targeted. But many industry suppliers have seen their share prices slashed by 10%, 20%, or even 30% in recent weeks. Both Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) and Meta Platforms (NASDAQ: META), for example, have lost roughly 15% of their value over the past month.
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The second challenge concerns CEO Jensen Huang's affair with tech executive and investor Alice Huang, who faces allegations that she's a Chinese spy. Nvidia issued a press release apologizing for its leaders' actions, but uncertainty remains regarding potential regulatory actions. A second alleged affair -- this one with Kimberly Powell, Nvidia's vice president of healthcare -- was later uncovered by The New York Times. Nvidia's board was considering ousting Huang from his role, but on Thursday morning, he resigned. For now, Chief Financial Officer Colette Kress will step into the CEO role on an interim basis.
As difficult as those issues are for the chipmaker, the third challenge could have a lasting impact.
Major Nvidia customer Anthropic this week updated its pre-IPO filing with the claim that it had been able to adapt its Claude Mythos large language model to run on AMD's competing hardware in just three days. That success would drastically reduce Anthropic's reliance on Nvidia chips, as it would dramatically reduce the moat created by Nvidia's CUDA software platform.
"Anthropic's IPO roadshow material has one very interesting nugget: a slide that shows it took its Claude Mythos Preview model just around three days to figure out how to run another model on AMD's MI355X GPUs vs. the 6-12 months that it typically takes to prepare a new compute platform for inference-related operations. Basically, Anthropic is now treating GPUs as fungible units of compute, with a significantly reduced barrier to switch from one platform to another. This is predictably leading some to declare that Nvidia's CUDA moat might well be dead for all practical intents and purposes."
In response, Wall Street has cooled further on Nvidia stock. To be clear, most analysts covering the company still maintain a "buy" rating on its shares. But in recent days, three of them have lowered their 12-month price targets. Notably, analysts at Robert W. Baird have lowered their price target from $500 per share to just $200. Additional downgrades or price target reductions may be in the cards as additional headwinds are digested.
But here's the thing: Nvidia is still an exceptional blue chip stock, one which rarely goes on sale. Buying during periods of uncertainty can be risky, but it may also be the only chance to secure an attractive price for such a high-growth, high-quality business.
Nvidia is currently under fire. There's no doubting that. But the company's valuation and growth projections more than make up for today's uncertainty.
Right now, Nvidia stock trades at just 22 times earnings. The S&P 500, for comparison, trades at 26 times earnings. That means the giant chipmaker is trading at a discount of about 15% to the broader market. This despite the fact that analysts expect Nvidia's sales to grow by 91% this year, with another 68% growth expected in 2027. Earnings are expected to rise in tandem, and based on that outlook, its shares trade at just 11 times forward earnings.
To be clear, there are plenty of risks on the horizon. No one knows what will happen next. Who will replace Huang as the next permanent CEO? Will Huang's past actions cause scrutiny from regulators or government agencies? Are its GPUs destined for commoditization?
These are legitimate concerns. But in the near term, Nvidia's financial prospects are bright, as are projections for AI demand. Its current valuation, meanwhile, seems to already be pricing in plenty of uncertainty.
I'm not sure investors should go all-in on Nvidia stock, but it certainly belongs in most portfolios, even if that exposure is through a diversified index fund.
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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.
Wall Street Is Writing Off Nvidia Stock. Here's Why That's a Mistake. was originally published by The Motley Fool
