[Baird Downgrades Nvidia Amid CEO Uncertainty and AI Capital Concerns]
In a note dated Wednesday, Baird’s analyst Tristan Gerra said the new rating should persist until the U.S. government reveals its stance on the situation that has emerged after Huang admitted to an extramarital affair, reportedly with a woman identified by intelligence agencies as a Chinese spy. While the firm acknowledges other sources of demand, such as U.S. chip sales, it warned that export controls could significantly impact revenue, potentially resulting in a $5 billion write‑down. Gerra also predicted tighter export controls on Southeast Asian data‑center activities and flagged the Department of Justice’s possible involvement in investigating Megaspeed, a Nvidia partner implicated in directing chips to China.
Despite these risks, Gerra believes the stock’s decline may not continue, stating that its current valuation already incorporates these concerns but that a clearer picture could stabilize the share price in the near term.
