Baird has downgraded Nvidia to neutral and slashed its price target 60 percent to 200 dollars, after the chipmaker board said it would launch an investigation into reports that chief executive Jensen Huang was the target of a foreign espionage effort. Analysts Tristan Gerra and Tyler Bomba wrote that Huang might have to step down as chief executive.
Why it matters
The analysts said the odds of a chief executive transition at Nvidia are increasing heading into 2027, and they favour an outside hire over an internal promotion. The call is one of the sharpest from a major broker since the crisis began, and the 60 percent cut in the price target shows how far the firm thinks the stock could fall.
The downgrade followed a week of turmoil. Nvidia shares fell about 8 percent in after hours trading after The Wall Street Journal reported the board is preparing to oust Huang, and prediction markets put the odds of his exit by the end of the year at about 75 percent. The board met on Wednesday to discuss his future.
What happens next
Baird is not alone in moving. The board has hired Wachtell, a firm known for boardroom battles, to advise on the probe, and the governance questions around Huang are now as important as the business. Huang is the company largest shareholder, owning about 3.6 percent, and he has run the business for 33 years.
For now, the downgrade is a warning rather than a verdict. If the board keeps Huang, the stock may steady. If he goes, the transition will dominate the story into 2027. Either way, Baird has made its view clear: the risk is no longer just about chips.
The downgrade followed a week of turmoil for the chipmaker. Nvidia shares fell about 8 percent in after hours trading after The Wall Street Journal reported the board is preparing to oust Huang, and prediction markets put the odds of his exit by the end of the year at about 75 percent. The board has hired Wachtell, a firm known for boardroom battles, to advise on the probe, and the governance questions are now as important as the business. Huang is the company largest shareholder, owning about 3.6 percent, and he has run the business for 33 years with no employment, severance or change in control agreements.
