Baird cuts Nvidia price target by 60% amid AI spending slowdown and CEO controversy

Baird Securities downgraded Nvidia Corp. to neutral from outperform and reduced its price target to $200, down from $500. The brokerage said the move reflects growing uncertainty about artificial-intelligence capital spending by major cloud providers and questions surrounding chief executive Jensen Huang.

Analyst Tristan Gerra noted that forecasts for data-centre demand through 2027 have become less clear, and he expects AI-related spending by hyperscalers to grow at about 40% or less next year. He also warned that 10% to 30% of channel orders could be cut pre-emptively and that supply constraints might delay data-centre expansion.

The downgrade coincides with reports that Huang admitted to an extramarital affair involving a woman whom U.S. intelligence officials suspect may be a Chinese spy, prompting an internal board investigation. Baird said the neutral rating will remain until the U.S. government clarifies its response to the matter.

Other analysts have adjusted their outlooks as well: Morgan Stanley removed Nvidia from its top semiconductor pick, Wells Fargo lowered its target to $300, while Bank of America kept a buy rating with a $350 target but noted that rivals such as AMD, Broadcom and Marvell could benefit from Nvidia’s distractions.

Nvidia shares closed at $168.89, down 15.6% over the past week and hovering near a 52-week low. The stock rose 5.3% in pre-market trading on Wednesday ahead of the company’s quarterly earnings report scheduled for Nov. 17.