Nvidia’s (NVDA) chief executive Jensen Huang resigned on Nov. 12. His departure follows reports of two extramarital affairs, including one with an alleged Chinese spy, evolving the affairs from a personal matter to a corporate governance and national security headache.
And while controversies like that often destroy shareholder value, the derivatives market remains fully convinced that NVDA shares will recover rather swiftly in the weeks ahead.
At the time of writing, Nvidia is trading roughly 30% below its year-to-date high set in early October.
Options Sentiment Remains Bullish for Nvidia Stock
Analysts involving Dan Ives are highlighting what is broadly known as the “key man risk” in their latest research notes following Huang’s departure from Nvidia.
Yet, traders are increasingly betting on bullish call options – signaling the AI stock remains poised for upside heading into 2027.
According to Barchart’s latest data, the put-to-call ratio on contracts expiring Dec. 24 sits at 0.50 as of writing, whereas a reading below 1.00 is typically interpreted as constructive.
And the upper price on those contracts is set at about $185 currently, suggesting Nvidia stock could rally nearly 13% through the remainder of this year.
NVDA Shares Have Entered Oversold Territory
While Ives reduced his fair value estimate for NVDA stock this morning, he also admitted that the giant’s dominance in the AI market, and therefore its underlying investment thesis, remains intact.
Crucially, the recent selloff amid a broader tech rout has contracted the chipmaker’s forward price-to-earnings (P/E) multiple to about 18x, which signals a notable discount to its historical averages.
Even from a technical perspective, Nvidia’s relative strength index (RSI) currently sits in the mid-20s, indicating oversold conditions that often trigger a near-term rally.
A small 0.6% dividend yield makes the AI stock even more attractive to buy on the dip.
What’s the Consensus Rating on Nvidia?
Other Wall Street analysts haven’t thrown in the towel on NVDA either.
Despite the AI rout and the more recent Huang controversy, the consensus rating on Nvidia shares remains at “Strong Buy,” with the mean price objective of about $324 indicating they could nearly double from here over the next 12 months.
On the date of publication, Wajeeh Khan did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.