Baird downgrades Nvidia to neutral, slashes price target by 60% to $200.

November 12 - U.S. brokerage Baird downgraded Nvidia's rating from "Buy/Outperform" to "Neutral," while significantly slashing its target price from $500 to $200, a 60% reduction. This move has drawn attention on Wall Street, as Nvidia has long been favored by the vast majority of analysts, and the downgrade is seen as a relatively rare bearish signal. Baird analyst Tristan Gerra noted in the report that the main reasons for the downgrade include:

· AI spending growth may slow: It is expected that hyperscalers' AI capital expenditure growth in 2027 could drop to about 40% or lower, mainly due to supply constraints, while early signs of softening demand have already appeared.

· Risks of export restrictions to China: Concerns that the U.S. may further tighten chip exports to China. The analyst believes that if H200 chip exports to China are banned, related inventory in Asian warehouses could face write-down risks of up to about $5 billion; in addition, about 10%-30% of orders through Southeast Asian channels may face cancellation due to anticipated restrictions.

· Leadership uncertainty: Jensen Huang's extramarital affair and an investigation suspected to involve national security issues have led to uncertainty regarding his CEO tenure. Baird believes the probability of a CEO transition before 2027 is rising, with a preference for an external candidate to take over.

The report also mentioned that visibility for the data center business in 2027 is declining, and supply issues remain the main constraint, although the H300 series chips are still in short supply. The analyst expects Nvidia's stock price may remain range-bound in the short term until the investigation results, policy impacts, and financial fallout become clear.