- Nvidia shares rose nearly 4% after a two-day drop of almost 10% in early trading
- AI and semiconductor stocks rebounded following strong earnings from AI cloud provider CoreWeave
- Baird downgraded Nvidia citing uncertain 2027 demand and CEO Jensen Huang's leadership status
Nvidia shares staged a recovery on Wednesday after losing nearly 10% over the previous two sessions. Dip-buyers returned to the stock, encouraged by a broader rebound in AI and semiconductor shares.
However, the recovery came alongside fresh Wall Street downgrades, highlighting the growing divide between investors betting on Nvidia's long-term AI opportunity and analysts worried about near-term risks.
Nvidia rose as much as 4.76% in early trading before trimming gains. At 11:19 am ET, shares traded at $174.92, up 3.9% for the session, according to the market data. The stock had closed Tuesday at $168.89 after falling 5.47%. It had also dropped 4.3% on Monday.
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The rebound followed stronger results from AI cloud infrastructure provider CoreWeave. Its earnings and improved outlook helped ease concerns about a slowdown in AI infrastructure spending, lifting semiconductor and memory stocks.
Wall Street's assessment of Nvidia has become more cautious. Baird downgraded the chipmaker to Neutral from Buy and slashed its price target to $200 from $500. Analyst Tristan Gerra cited limited visibility into 2027 data centre demand, supply constraints and uncertainty surrounding CEO Jensen Huang's future.
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Baird also expects hyperscaler AI capital expenditure growth to slow to around 40% or less in 2027. It warned that 10% to 30% of advance orders could face cuts if China-related demand weakens.
Morgan Stanley separately removed Nvidia from its top-pick list after the stock fell more than 25% since its October 2 selection. The brokerage retained its Overweight rating and price target but flagged uncertainty around Huang's leadership. Bank of America also removed Nvidia from its US 1 list.
The leadership controversy remains unresolved. Nvidia's board has appointed outside law firm Wachtell, Lipton, Rosen & Katz to conduct an independent investigation into reports that Huang was targeted by a foreign intelligence operation. Three Republican committee chairmen have also sought a private briefing with him on November 18.
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Nvidia's next major test arrives on November 17, when it reports quarterly results. Until then, the stock faces competing forces: renewed confidence in AI spending and mounting uncertainty over leadership, China sales and future demand.
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