Baird downgrades Nvidia stock rating on data center visibility

Baird analyst Tristan Gerra downgraded Nvidia (NVDA) to Neutral, citing uncertainties around CEO Jensen Huang's tenure and U.S. government investigations. Shares fell 12% since Huang's affair was revealed. The board launched an independent probe, hiring Wachtell, Lipton, Rosen & Katz. Gerra also noted near-term risks, including a potential $5 billion write-down due to H200 export bans to China.

CoreWeave's 16% rally and strong Q3 results, including 30%-50% GPU pricing increases and improved margins, suggest robust AI demand. Analyst KC Rajkumar argues this undermines concerns about weakening infrastructure demand and financial pressure. CoreWeave's CFO assured investors about debt servicing. Nvidia (NVDA) is seen as a key beneficiary due to continued GPU demand and CoreWeave's plans to use Nvidia's next-gen platform.

Nvidia shares rose over 4% in premarket trading despite Baird downgrading the stock and Morgan Stanley removing it as a top pick. The company is attempting to recover from earlier losses this week.

Nvidia's stock rebounded premarket after Morgan Stanley removed it from top picks. CEO Jensen Huang returned to work, and the company retained a law firm for an independent investigation. The board found no evidence of trade secret or national security risks. Huang apologized for personal misconduct involving a woman suspected of spying for China, which China's Foreign Ministry called unsubstantiated.

CoreWeave's stock rose 10% after reporting strong revenue growth and reduced debt concerns, lifting other AI cloud stocks and Nvidia by 5%. The company raised its annual revenue forecast and plans to avoid unsecured debt. Bernstein analysts noted positive results but warned of future risks. Nvidia's gains followed a two-day decline amid leadership concerns. Other AI infrastructure stocks like Nebius, Iren, Oracle, and Applied Digital also saw premarket gains.

Nvidia (NVDA) lost $430 billion in market value after CEO Jensen Huang and chip exports to China were questioned. A report alleges a Chinese businesswoman helped firms receive $7.5 billion in Nvidia chips, including U.S. export-restricted ones. Nvidia's board is investigating, finding no evidence of national security risks. Political pressure is rising, with senators calling for Huang's resignation and stricter export controls. The FBI is also probing potential foreign intelligence involvement.