Investors received another caution about Nvidia’s growth prospects Wednesday, Nov. 11, when Baird cut its rating to Neutral from Outperform, citing questions about 2027 data-center budgets and the possibility demand may ease, Reuters reported.
Reuters also reported that Morgan Stanley removed Nvidia from its Top Pick list but kept its Overweight rating. Nvidia shares had fallen more than 25% since the bank put the stock on the list the previous month, Reuters said. EconoTimes earlier covered Baird’s Nvidia rating change amid 2027 spending concerns.
Nvidia’s fiscal 2027 second-quarter filing provides a picture of operating constraints behind its data-center outlook. The company said buyers may defer purchases when infrastructure or capital is unavailable, while it faced supply constraints of its own. Nvidia reported $279 billion in supply and capacity commitments as of July 26. The comparable figure at the prior quarter-end was $119 billion.
Reuters said the downgrade also reflected questions about CEO Jensen Huang’s tenure. Nvidia’s board said Nov. 8 it had opened an independent investigation into reports of a foreign intelligence effort targeting Huang. The board said it had no reason to believe national security or Nvidia secrets were compromised and that its inquiry would examine all available information. It did not identify a country.
In a separate message published by Nvidia on Nov. 8, Huang said he had been unfaithful to his wife and would cooperate with the investigation. On Nov. 10, the board’s independent directors named former acting U.S. Attorney Joon H. Kim and Wachtell, Lipton, Rosen & Katz to conduct the review. Reuters reported investor anxiety over the affair controversy had erased more than $427 billion in Nvidia market value over the two sessions before its Nov. 11 report. Reuters also pointed to a broader technology selloff after the U.S. midterm elections.
Nvidia is scheduled to release fiscal 2027 third-quarter results Tuesday, Nov. 17, at about 4:20 p.m. ET (21:20 UTC), followed by a conference call at 5 p.m. ET (22:00 UTC).
