Baird downgraded Nvidia to Neutral from Outperform on Wednesday and cut its price target 60 percent to $200 from $500.
Few analysts doubt Nvidia, yet Baird’s Tristan Gerra cited a possible slowdown in AI spending, supply constraints and uncertainty over Chief Executive Jensen Huang’s tenure.
The $200 target still implies an 18% gain from Tuesday’s close, CNBC reported. The call is rare. According to LSEG, just three of 64 analysts rate Nvidia shares hold or underperform, CNBC said.
Supply Limits and 2027 Visibility Drive the Cut
Finbold said the Huang scandal played only a limited role in the decision. Baird focused heavily on expected data center turmoil in 2027, it reported, citing supply constraints, delays and reduced visibility.
Baird expects growth in AI spending by hyperscalers to slow to 40 percent or lower in 2027, Moneycontrol reported. Investing.com said Gerra described supply issues as “mostly the reason,” with very recent signs of softer demand as well.
$NVDA just announced an independent board investigation into reports that CEO Jensen Huang was targeted by a foreign intelligence effort. The board emphasized it has “no reason to believe that either national security or Nvidia secrets were compromised” while reaffirming its… pic.twitter.com/jc7UfUF1iT
Gerra delayed his 2027 data center forecasts and trimmed estimates for 2028 and later, Investing.com said. Stocktwits said Baird is holding off on publishing them because visibility deteriorated sharply in recent weeks.
Baird Predicts $5B Write-Down
“A new ban on H200 exports to China,” Gerra predicted. He wrote that low-level shipping is occurring into Asia-based warehouses, and put a number on it:
“We believe low-level shipping is taking place into Asia-based warehouses with some inventories awaiting China demand. We estimate this could translate into a $5B write down.”
He also expects export-control limits aimed at Southeast Asia data center loopholes. He flagged possible Justice Department action against Megaspeed, an Nvidia business partner, Yahoo Finance reported. Investing.com describes Megaspeed as a Singapore-based data center company that U.S. intelligence agencies say has been passing information to Beijing.
Gerra warned that 10-30 percent of channel orders could face pre-emptive cuts, Moneycontrol said. U.S. demand alone could offset lost Southeast Asian sales, but not with certainty, CNBC reported.
Nvidia can only bottom when the majority of analysts cut and run.. We are getting the early birds out of the cage
“Revenue impact could be concentrated in a given quarter with cash flow constrained hyperscalers not able to pick up the slack within that given quarter,” Gerra wrote.
BigGo Finance reported that Gerra sees demand for Nvidia’s H300 chips still far exceeding supply.
BREAKING 🚨: Nvidia $NVDA has now erased $1.75 Trillion of market cap over the last month 📉 📉 Nice work Jensen 🤦 pic.twitter.com/BbZlgvbEhD
Board Investigates Huang's Affair
Huang admitted an affair on Sunday in an email to employees, Yahoo Finance said. Nvidia’s board launched an independent investigation into reports that the woman was allegedly a spy for the Chinese government. It hired Wachtell, Lipton, Rosen & Katz, with former acting US Attorney of the Southern District of New York Joon Kim leading the inquiry.
Investing.com said President Donald Trump has said the FBI is investigating. Gerra tied his rating to those outcomes:
“Downgrading to Neutral until uncertainties regarding U.S. government action likely resulting from the upcoming congressional hearing are lifted, U.S. government investigations reach their conclusions, revenue impact from risk channel near-term adjustments along with potential charges is quantified, and uncertainties around CEO tenure clear,” he wrote.
The Street Stays Well Above Baird
Gerra is an outlier. TipRanks shows 33 Buy ratings and two Hold, with an average 12-month target of $317.83, according to Finbold and BigGo. MarketBeat puts its consensus target at $312.87.
Morgan Stanley’s Joseph Moore removed Nvidia as a Top Pick under the bank’s stop-loss policy, after the stock fell more than 25% from its October 2 selection, Investing.com said. Stocktwits said the bank kept its Overweight rating and $300 target, and that Bank of America dropped Nvidia from its “US 1 List” on Tuesday.
Nvidia shares have fallen 29 percent from their October 6 high, taking market capitalisation to around USD 4 trillion from USD 5.8 trillion a month earlier, Moneycontrol reported. The stock is on track for a sixth straight weekly decline, which Moneycontrol said has not happened since 2012.
Nvidia closed at $168.89 on Tuesday, just above its 52-week low of $164.27, Stocktwits said. Shares rose nearly 4 percent premarket Wednesday, helped by a wider chip rally.
Gerra does not expect a slide to continue, but sees limited upside for now.
“While some of these concerns are already embedded in Nvidia’s valuation, we think stock will at best stay in a trading range until the dust settles,” he said. Nvidia reports earnings on November 17.