Nvidia handed downgrade on Jensen Huang and AI uncertainty
Baird gave Nvidia a rare downgrade on Wednesday, as chief executive Jensen Huang 's alleged affair with a Chinese spy casts doubt over his tenure. In a note, Baird analyst Tristan Gerra more than halved the chip maker's target from $500 to $200. Mr Gerra delayed his forecasts for data centres in 2027, saying supply issues are “mostly behind a potential slowdown, alongside potential demand…
On Wednesday, Baird downgraded Nvidia's stock, a rare move for the chip maker, amid controversy surrounding its CEO, Jensen Huang. Huang's alleged affair with a Chinese spy has raised concerns about his leadership and the company's future. Baird's Tristan Gerra reduced the target price from $500 to $200, and delayed forecasts for data centers in 2027, citing potential supply issues and demand slowdowns.
However, Nvidia shares rebounded after better-than-expected quarterly results from CoreWeave, a rival chip company. Despite this, Nvidia is on track for a sixth consecutive week of losses, with the stock down about 8% for the year. Huang admitted to the affair in a letter to employees, expressing regret and commitment to regaining trust.
While the board has launched an investigation, some legislators are calling for a congressional hearing. Analysts are assessing the impact of Huang's leadership on Nvidia's direction, with some estimating a 15% chance of him being removed as CEO, which could significantly alter the company's value and competitive position in the AI GPU market.
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