Baird has downgraded Nvidia Corp. to Neutral from Outperform and cut its price target to $200 from $500. The brokerage pointed to the uncertainty around Chief Executive Officer Jensen Huang and a possible slowdown in artificial intelligence spending by the largest cloud companies.

It is an unusual move on a stock Wall Street remains overwhelmingly bullish on. Only three of the 64 analysts tracking Nvidia rate it hold or underperform, according to LSEG data cited by CNBC.

In a note on Wednesday, Baird analyst Tristan Gerra said he had less visibility into data-centre forecasts for 2027, Investing.com reported. He expects hyperscalers' AI capital spending growth to slow to about 40% or less next year. He also warned that 10% to 30% of channel orders could face pre-emptive cuts, according to HuggingNews, and that supply constraints could delay data-centre growth.

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Huang's future is the other big unknown. Gerra expects the Neutral rating to stay until the US government decides how to respond to Huang admitting an extramarital affair, reportedly with a woman US intelligence officials believe is a Chinese spy, CNBC reported. Nvidia's board is conducting an internal investigation.

The downgrade came the same day Morgan Stanley removed Nvidia as its top semiconductor pick.

Also, Wells Fargo has also cut its price target to $300 from $315, citing the investigations around Huang, according to Investing.com. Bank of America has stuck with its Buy rating and a $350 target, though it has flagged that rivals such as AMD, Broadcom and Marvell could gain ground while Nvidia is distracted.

Nvidia closed at $168.89 on Tuesday. That's down 15.6% over the past week and just above its 52-week low of $164.27, Investing.com reported. CNBC says the stock is now 30% below its October high.

“It's certainly not good for the AI trade,” Zacks Chief Equity Strategist John Blank told CNBC's Squawk Box Europe.

The shares, however, rebounded in US premarket trade on Wednesday. The stock was up 5.3% as of 5:47 a.m. ET on Wednesday, after closing down 5.47% on Tuesday and 4.3% on Monday. The company will report its quarterly results on Nov. 17.

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