Nvidia’s torrid run on Wall Street hit a fresh setback on Wednesday as Baird downgraded the chipmaker and slashed its price target by 60%, warning that US curbs on sales to China and signs of cooling artificial intelligence spending could weigh on demand for its prized chips.
The brokerage cut its rating to “Neutral” from “Buy” and reduced its target to $200 from $500, one of the steepest cuts Wall Street has handed Nvidia in years. Shares closed at $168.90 on Tuesday and are on course for their biggest weekly drop since March 2025.
Baird said demand from data-centre operators in South-East Asia and China remained crucial for Nvidia, and that any pre-emptive or government-imposed restrictions on exports could weigh on revenues. Demand for the company’s H300 chips still outpaces supply, the brokerage noted, but timing risks mean 10 to 30 per cent of pre-emptive orders could be exposed to potential cuts.
The downgrade also pointed to a broader reassessment of the AI boom. Baird expects growth in capital spending by the big AI hyperscalers to slow to about 40 per cent year on year in 2027, held back by supply constraints and early signs of demand softening.
It is not the only firm pulling back. Morgan Stanley has removed Nvidia from its top pick list after the stock fell more than 25 per cent since it was named a top pick a month ago, while BofA Global Research dropped the company from its US 1 List. At least three other brokerages, including Wells Fargo and Citigroup, have cut their price targets this week.
Leadership uncertainty is also hanging over the stock. Baird said the odds of a chief executive transition were increasing into 2027 and that an outsider was more likely to be hired than someone promoted from within, as the board investigates chief executive Jensen Huang’s relationship with a Chinese businesswoman allegedly linked to a spying operation. Nvidia is due to report third-quarter results after markets close on November 17.
Sources: Reuters — “Baird downgrades Nvidia on China curbs, AI demand worries” (https://www.reuters.com/world/china/baird-downgrades-nvidia-china-curbs-ai-demand-worries-2026-11-11/)
