Baird Downgrades Nvidia on China Chip Curbs and AI Demand Worries
· Business · Economic Times, Bloomberg
Baird cut Nvidia’s price target to $200 from $500 and downgraded the stock to “Neutral” on November 11, 2026, citing US restrictions on chip sales to China and a potential slowdown in AI spending. The brokerage highlighted weakening demand, supply constraints and leadership uncertainty amid an investigation into CEO Jensen Huang’s alleged ties to a Chinese businesswoman. Nvidia shares closed at $168.9 on Tuesday, marking the largest weekly drop since March 2025. Other firms—Morgan Stanley, BofA, Wells Fargo and Citigroup—have also trimmed or removed Nvidia from top‑pick lists. AI hyperscaler Capex growth is projected at only 40% YoY in 2027. The company faces heightened regulatory and geopolitical risk, with China and Southeast Asian data‑center demand critical to its revenue outlook. Additional pre‑emptive orders could be cut by 10‑30% amid timing uncertainties. Baird’s downgrade reflects broader sector concerns about earnings sustainability and market volatility. The stock is likely
Why it matters
Institutional downgrades and a 60% price‑target cut can trigger selling pressure, eroding Nvidia’s market valuation and affecting related semiconductor supply chains. Portfolio rebalancing by Baird and other brokerages may lead to short‑term liquidity strains for the stock, influencing broader tech market sentiment. Investors are now focused on regulatory clarity and AI demand trends, which could impact capital allocation across the sector and reshape earnings expectations for Q2 FY27.
Read the original report — Economic Times
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