Nvidia Stock Just Had Its Price Target Slashed 60%. Others Still Say Buy. Who's Right?

Wall Street remains split on the value of Nvidia (NVDA +4.56%), following CEO Jensen Huang's scandal. Baird recently downgraded the AI chipmaker to Neutral from Outperform and slashed its price target by 60%, from $500 to $200. Morgan Stanley, however, kept Nvidia on its list of top stock ideas, albeit removing it from its list of top picks due to a 25% drop rule. Both firms are around $100 a share apart on the world's leading AI company.

Nvidia's stock shrugged off both calls, surging nearly 5% to about $177 by midday Wednesday. This rally followed strong results from AI cloud company CoreWeave (CRWV +26.41%). Nevertheless, Nvidia is still 26% below its Oct. 6 record close of $239.24. Baird's concern lies not with today's demand but with next year. The firm pushed back its 2027 data center forecasts due to supply issues and a possible softening in demand from big cloud companies. Baird also cited uncertainty around Huang's tenure as supporting a Neutral rating.

Morgan Stanley's move appears larger than it is, as the firm removed Nvidia from its top picks due to a rule that a top pick falling more than 25% from its day of nomination is automatically dropped. Nvidia was named on Oct. 2. Moore, the analyst, said there's no change to the firm's view of a strong and durable AI buildout.

Wells Fargo also has a $300 price target on Nvidia, trimming it by $15 on Tuesday. The bank expects Nvidia to report solid earnings, which may assuage concerns about the AI investment cycle's durability. The latest numbers show strong revenue growth, with Nvidia's revenue rising 106% to $96.2 billion in its most recent quarter, and data center sales reaching $89 billion.