Bernstein: The Huang Renxun incident may increase regulatory risks for NVIDIA, but maintains a target price of $400

Bernstein stated that the recent personal relationship-related allegations faced by NVIDIA CEO Jensen Huang are unlikely to directly impact the demand for the company's AI chips, but they may increase regulatory and political pressure. This incident could, at the very least, severely distract management's attention, and at worst, provide a reason for bipartisan lawmakers in the United States to intensify scrutiny of NVIDIA.

Additionally, the firm warned that NVIDIA faces key person risk. Jensen Huang has long dominated the company's strategy and major operational decisions, reportedly overseeing about 60 direct reports, and the company's management system heavily relies on his personal leadership. It is currently unclear who could succeed him if he is unable to continue in his role. Despite these risks, Bernstein maintains its outperform rating on NVIDIA with a target price of $400.