Nvidia shares recover after two days of losses as Baird downgrades NVDA, Morgan Stanley drops it from its Top Picks, and investors await November 17 earnings.

Table of contents

  • Nvidia stock is up 3% today after falling 4.3% Monday and 5.47% Tuesday to $168.89, near its 52-week low of $164.27
  • Baird downgraded NVDA to Neutral and cut its target to $200 from $500, citing limited 2027 visibility, supply constraints, and possible hyperscaler capex growth
  • Morgan Stanley dropped NVDA from its Top Picks under a stop-loss rule, Citi and Wells Fargo trimmed targets but stayed positive

Nvidia shares rebounded by nearly 4% in premarket trading on Wednesday, November 11, recovering some of the losses recorded over the previous two sessions. 

This happens as investors assessed fresh concerns surrounding the chipmaker's leadership and slowing artificial intelligence spending. 

The recovery came despite Baird cutting its price target by 60% and Morgan Stanley removing the stock from its list of top semiconductor picks.

Nvidia stock climbed as high as $173.83, up approximately 3%, after closing Tuesday's session at $168.89. 

The stock had fallen 4.3% on Monday and another 5.47% on Tuesday, leaving it close to its 52-week low of $164.27. 

Nvidia's $500 price target cut to $200 as analyst flags new risks

The two-day decline followed reports concerning CEO Jensen Huang and his alleged connection to a Chinese intelligence operation, adding to uncertainty around the company's leadership and potential exposure to tighter US restrictions on chip exports.

Baird analyst Tristan Gerra downgraded Nvidia to Neutral from Outperform on Wednesday and reduced his 12-month price target to $200 from $500. 

The brokerage cited limited visibility into 2027 data center demand, supply constraints and the possibility of slower spending by major cloud computing companies.

Gerra expects AI capital expenditure by hyperscalers to grow by approximately 40% or less in 2027, compared with the stronger expansion recorded in recent years. 

Although demand for Nvidia's H300 chips continues to exceed available supply, he warned that timing risks could expose between 10% and 30% of pre-emptive orders to potential cancellations.

The analyst also highlighted growing uncertainty surrounding Huang's tenure, suggesting that the possibility of a CEO transition could increase into 2027. 

He expects an external candidate to have a greater chance of succeeding Huang than an internal promotion. 

Baird believes these concerns could keep Nvidia shares within a trading range until investigations and US policy decisions provide greater clarity.

Morgan Stanley also removed Nvidia from its Top Pick list after the stock declined more than 25% since the bank selected it on October 2. 

Can Nvidia regain investor confidence ahead of its November 17 earnings?

However, the decision followed the firm's stop-loss policy rather than a change in its underlying assessment of Nvidia's business. Analyst Joseph Moore maintained an Overweight rating and his $300 price target.

Morgan Stanley continues to expect strong demand for AI infrastructure, pointing to Nvidia's upcoming Rubin and Rubin Ultra platforms as potential drivers of future growth. 

Its long-term forecasts project revenue reaching $406 billion in 2027, $690 billion in 2028 and $970 billion in 2029.

Other brokerages have also adjusted their expectations, with Bank of America removing Nvidia from its US 1 List. 

Meanwhile Citigroup reduced its price target to $285 from $315 and Wells Fargo lowered its target to $300 from $315. Both firms maintained positive ratings.

Meanwhile, Nvidia's board has appointed law firm Wachtell, Lipton, Rosen & Katz to conduct an independent investigation into the allegations surrounding Huang. 

The company is also facing scrutiny from US authorities over possible national security implications.

Investors are now looking toward Nvidia's third-quarter earnings report, scheduled for November 17 after market close, for further evidence of whether demand for AI chips can sustain the company's growth.

Hassan Shittu is a Web3 and finance journalist and editor with over six years of experience writing for crypto-native, stock market and tech publications. A five-year Web3 trader with hands-on experience in meme coins and NFTs, he brings firsthand market knowledge and a technical writing background to his coverage. Outside of crypto, he enjoys football.