Baird has downgraded Nvidia to Neutral from Outperform on Wednesday and cut its price target on the stock by 60 percent to $200 from $500, citing concerns over a possible slowdown in artificial intelligence (AI) spending, supply constraints and leadership uncertainty.
Analyst Tristan Gerra said forecasts for data centre growth in 2027 face potential delays due to supply constraints, softer demand and limited visibility.
The brokerage expects growth in AI spending by hyperscalers to slow to 40 percent or lower in 2027. It also warned that 10-30 percent of channel orders could face pre-emptive cuts.
Despite strong demand for Nvidia's H300 chips, Baird flagged uncertainty over Chief Executive Officer Jensen Huang's tenure into 2027.
Nvidia shares have remained under pressure as investors increasingly question the sustainability of the AI-driven rally and the hundreds of billions of dollars being committed to AI infrastructure.