Key facts
- Baird cut its Nvidia price target to $200 from $500, a 60% reduction, and moved to Neutral from Buy.
- Baird said AI hyperscaler capex growth could slow to about 40% year-on-year in 2027 on supply constraints and softening demand.
- Baird said 10-30% of pre-emptive orders for Nvidia's H300 chips could be exposed to potential cuts on timing risks.
- Baird said the odds of a CEO transition at Nvidia are increasing into 2027 and favor an outsider over an internal promotion.
- Nvidia is expected to report third-quarter results after markets close on November 17.
Baird downgraded Nvidia to Neutral from Buy on November 11, 2026 and cut its price target to $200 from $500, a 60% reduction. The brokerage cited growing risks from US restrictions on chip sales to China and a potential slowdown in AI spending that could weigh on demand for Nvidia's chips.
Baird said demand from Southeast Asian data-center operators and China is crucial for Nvidia, and that any pre-emptive or US government restrictions on exports could weigh on revenues. It said AI hyperscaler capex growth could slow to about 40% year-on-year in 2027, held back by supply constraints and early signs of demand softening.
The brokerage said demand for Nvidia's H300 chips outpaces supply, but that timing risks could leave 10-30% of pre-emptive orders exposed to potential cuts. It said Nvidia shares are likely to remain range-bound in the near term given the investigation into CEO Jensen Huang's relationship with a Chinese businesswoman that is allegedly part of a spying operation.
On leadership, Baird said: "The odds of CEO transition are increasing into 2027. We think the odds favor an outsider being hired as CEO versus someone promoted from within."
Nvidia shares closed at $168.9 on Tuesday and were on track for their biggest weekly drop since March 2025, with uncertainty over top leadership weighing on the stock. Morgan Stanley removed Nvidia from its top pick list after the stock fell more than 25% since being named a top pick a month earlier. BofA Global Research also removed Nvidia from its US 1 List, and at least three other brokerages, including Wells Fargo and Citigroup, reduced their price targets earlier in the week.
Nvidia is expected to report third-quarter results after markets close on November 17.