Nvidia downgraded by Baird amid CEO concerns and AI market uncertainty

According to data from LSEG, Baird’s move puts them among a small minority of analysts; only three out of 64 currently rate Nvidia shares as hold or underperform. Analyst Tristan Gerra’s note highlighted the uncertainty surrounding Huang’s position following his admission of an extramarital affair and an ongoing internal investigation by Nvidia’s board, with potential links to Chinese intelligence.

Gerra anticipates potential repercussions, including a possible ban on exports of Nvidia’s H200 chips to China, and expects a $5 billion write-down due to existing shipments in Asia. He also foresees stricter export controls targeting data center loopholes in Southeast Asia and potential action from the Department of Justice regarding Megaspeed, an Nvidia partner under scrutiny for allegedly rerouting chips to China.

While U.S. demand could potentially offset losses from Southeast Asian restrictions, Gerra cautioned that it’s not assured. He also expressed concern about a potential slowdown in demand for AI infrastructure, projecting a 40% year-over-year increase in hyperscaler capital expenditures by 2027. Nvidia’s stock has fallen roughly 30% from its peak in October 2026.

Despite these challenges, Gerra believes the stock’s decline may stabilize. “While some of these concerns are already embedded in Nvidia’s valuation, we think stock will at best stay in a trading range until the dust settles,” he wrote.