Baird just dropped NVIDIA's price target from $500 to $200 and shifted its rating to neutral, mainly because it's worried about slowing AI investments, supply hiccups, and some uncertainty at the top.
Analyst Tristan Gerra said forecasts for data center growth in 2027 face potential delays due to supply constraints, softer demand, and limited visibility.
Investors eye NVIDIA earnings November 17
Baird thinks AI spending by big tech companies could slow down to 40% growth or less, and 10-30% of channel orders could face pre-emptive cuts.
Even with the downgrade, NVIDIA's stock bounced back a bit, up nearly 4% in premarket trading after an earlier dip.
Investors are still anxious about how long the AI boom can last and what US midterm elections could mean for future data centers.
All eyes are now on NVIDIA's earnings report coming November 17.