Baird Slashes Nvidia Price Target by 60% as Wall Street Turns Cautious on AI Giant
Baird downgraded Nvidia on Wednesday and slashed its price target on the chipmaker’s stock by 60%, to $200 from $500, in the starkest sign yet that Wall Street’s long love affair with the artificial intelligence leader is cooling. The brokerage pointed to tightening U.S. restrictions on advanced chip sales to China, a possible slowdown in AI spending by the biggest technology companies, and the unresolved questions hanging over chief executive Jensen Huang.
The downgrade, reported by Reuters on Wednesday morning, cut Nvidia’s rating to “Neutral” from “Outperform.” It landed in the middle of a brutal stretch for the stock: Nvidia shares closed at $168.89 on Tuesday and are on track for their biggest weekly drop since March 2025, after shedding about a quarter of their value from their recent peak.
A rare downgrade for the market’s most important stock
Downgrades of Nvidia have been rare. For most of the AI boom, analysts competed to raise their price targets on the company, whose graphics processors power the data centers behind the world’s largest AI systems. Baird analyst Tristan Gerra broke with that consensus, arguing that the risks facing the company have changed faster than the market has acknowledged.
Gerra’s central concern is China. Demand from Chinese customers and from data-center operators in Southeast Asia is crucial for Nvidia, and Baird warned that any pre-emptive restrictions — or new U.S. government limits on exports of advanced chips — could weigh directly on revenues. The firm also flagged the possibility that Washington’s response to the controversy surrounding Huang could bring further curbs.
The brokerage added that Nvidia shares are likely to remain range-bound in the near term, with the rating expected to stay at Neutral until Washington decides how to respond, the financial impact is quantified, and Huang’s role becomes clearer.
The AI spending question
Baird’s second worry is the pace of AI investment itself. The firm expects growth in spending by the largest cloud and AI companies — the hyperscalers that buy Nvidia chips by the tens of thousands — to slow to about 40% year on year in 2027, held back by supply constraints and early signs of demand softening. Forecasts for data-center growth in 2027 face potential delays for the same reasons, according to the brokerage.
That is a striking shift in tone for a market that has treated AI infrastructure spending as nearly unstoppable. If the biggest buyers of Nvidia’s chips start to spend more slowly, the company’s growth — and the premium valuation investors have placed on it — would come under pressure.
Baird was careful not to write the company off entirely. The firm still sees demand for Nvidia’s H300 chips exceeding supply, a sign that the most advanced hardware remains scarce. But scarcity at the top of the product line, Baird’s argument runs, does not insulate Nvidia from weaker demand elsewhere or from political risk.
Wall Street is pulling back in unison
Baird is not acting alone. The downgrade is part of a broader retreat by Wall Street firms that had been among Nvidia’s loudest champions.
Morgan Stanley removed Nvidia from its top-pick list after the stock fell more than 25% since being named a top pick a month ago, although it kept an Overweight rating on the shares. Bank of America removed Nvidia from its U.S. 1 List, and at least three other brokerages, including Wells Fargo and Citigroup, reduced their price targets earlier this week. Citigroup cut its target to $285 from $315. Aletheia Capital downgraded the stock to Hold, and Seaport set a Sell rating with a $180 target.
Even so, the Street remains broadly positive on balance. According to Benzinga Pro, 25 of the 26 analysts covering Nvidia still rate the stock a Buy or Strong Buy, and the consensus price target of about $336 is nearly double Tuesday’s closing price. Baird’s $200 target, while a steep cut, still implies roughly 18% upside from where the shares closed on Tuesday.
A stock under pressure from every direction
Nvidia’s slide has come even as the broader market rallied — the Dow Jones Industrial Average jumped 1,104 points on Monday in its best day since April. Nvidia, by contrast, has fallen roughly 10% over the past two sessions alone, and the stock shed about $400 billion in market value in two days earlier this week as the fallout from the Huang controversy deepened.
Shares opened higher on Wednesday at $173.32, and reports put the rebound at about 3%, suggesting that some investors see the selloff as overdone. But the direction of travel over the past week has been unmistakably down, and the Baird downgrade gives institutional investors a fresh reason to pause.
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The pressure on Nvidia is not only about chips or spending. The company’s board opened an independent investigation into Huang on Sunday, after reports that the chief executive had an affair with a Chinese businesswoman whom U.S. domestic intelligence officials suspect of being a Chinese spy. Huang admitted the infidelity in a memo to staff. President Donald Trump said on Monday that Huang had told him he did not know the woman was an operative, and that the FBI was “looking into” the matter.
A shareholder class action has also been filed, and a report in The Information said the relationship helped facilitate at least $7.5 billion of Nvidia chips reaching Chinese firms since 2023 through an intermediary network — a claim Reuters said it could not independently verify. The report does not say Huang knew about or approved any shipments. Huang is due to brief a House committee on November 18, and he must first respond to the committee’s questions by Wednesday.
Why this matters
Nvidia is not just another large company. It is the single most important supplier of the hardware behind the AI boom, and its stock has become a proxy for the entire AI trade. When Wall Street’s most bullish firms start cutting targets and removing the stock from their top-pick lists, it signals a wider reassessment of how much the AI buildout is worth — and how fast it can keep growing.
For American investors, the downgrade also matters because Nvidia sits at the center of retirement accounts, index funds and exchange-traded funds. A sustained slide in the stock would drag on the broader market, even as other sectors rally. The tension between Nvidia’s fall and the Dow’s record run this week shows how much the market’s leadership has narrowed to a single question: how much is AI really worth?
Latest developments
Nvidia is scheduled to report third-quarter results after the market closes on November 17, its first earnings release since the disclosure about Huang. That report — and the guidance that comes with it — will be the next real test of whether the company’s business is holding up while its leadership is under a cloud.
Investors will be watching for three things: whether data-center revenue is still growing at the pace the company promised, what management says about China and export controls, and whether Huang addresses the investigation directly. The House committee briefing the following day will add a political dimension that earnings alone cannot resolve.
Frequently Asked Questions
Why did Baird downgrade Nvidia?
Baird cut Nvidia to Neutral from Outperform, citing growing risks from U.S. restrictions on advanced chip sales to China, a possible slowdown in AI spending by large technology companies, and uncertainty over CEO Jensen Huang and the board investigation into him.
What is Baird’s new price target for Nvidia?
Baird cut its price target to $200 from $500, a reduction of 60%. The new target still implies roughly 18% upside from Tuesday’s closing price of $168.89.
Are other Wall Street firms also turning cautious on Nvidia?
Yes. Morgan Stanley removed Nvidia from its top-pick list, Bank of America removed it from its U.S. 1 List, and Citigroup and Wells Fargo cut their price targets. Aletheia Capital downgraded the stock to Hold and Seaport set a Sell rating. Even so, 25 of 26 analysts tracked by Benzinga Pro still rate Nvidia a Buy or Strong Buy.
When does Nvidia report earnings?
Nvidia is expected to report third-quarter results after markets close on November 17, its first earnings release since the disclosure about Huang. Huang is also due to brief a House committee on November 18.
What to watch next
The Baird downgrade does not settle the debate over Nvidia — it sharpens it. The bulls can point to a consensus target near $336, demand for the company’s most advanced chips that still exceeds supply, and a stock that bounced on Wednesday. The bears can point to a 60% target cut from a major brokerage, a coordinated pullback across Wall Street, a board investigation with no end in sight, and the prospect of new export curbs from Washington.
Which side is right will become clearer on November 17, when Nvidia reports earnings and Huang faces investors for the first time since the scandal broke. Until then, the most valuable company in the AI era is trading like a question mark — and Wall Street, for the first time in years, is no longer sure of the answer.
Sources: Reuters; CNBC (via Benzinga); Bloomberg (via Moneycontrol); Finimize; Le Private Banker; TradersView.
