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Baird downgraded HUDA’s rating to neutral and lowered its target price due to concerns about US export controls, a slowdown in AI capital spending and leadership uncertainty, believing that short- and medium-term demand is under pressure.
Brokerage firm Baird today listed a major US artificial intelligence (AI) chip maker.Huida (Nvidia) downgraded its stock rating and cut its target price by 60%, noting that the United States may tighten its chip sales to China and AI spending may slow, which will affect its chip demand.
Reuters reported that Baird cut his rating on HUDA stock to “Neutral” from “Buy” and cut the target price to US$200 from US$500.
Huida’s share price closed at $168.9 yesterday, and the weekly decline is likely to be the largest since March last year, mainly due to the personnel uncertainty of Huida’s leadership.
Bai Ya told that Huida CEOJen-Hsun Huang The relationship with a Chinese businesswoman suspected of being involved in espionage activities is still under investigation, which is likely to cause Huida’s share price to fluctuate a range in the short term.
Baird also reminded that for Huida, the needs of Southeast Asian data center operators and China are important, so any preventive export ban or final export control by the United States could affect its revenue.
Additionally, Baird warned that capital expenditure growth could fall to about 40% next year due to supply constraints and signs of softening demand from large cloud service providers that use AI.
Although Huida’s H300 chips are still in short supply, 10% to 30% of pre-orders are prone to cancellation due to timing risks.
Bai Ya also pointed out that the possibility of Huida changing CEO next year is increasing, but it is more likely to look for talents from outside than to promote from within.
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Baird cut her rating on HUDA stock to “neutral” from “buy” and lowered the target price to US$200 from US$500, reflecting her conservative view on future growth and valuation.
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Baird pointed out that if the United States tightens its chip export restrictions to China and the growth of AI spending slows, this may weaken demand for Huida chips; Southeast Asian data centers and the Chinese market are important sources of its revenue.
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Baird noted that the investigation related to Huang Renxun and Chinese business women is still unclear, and short-term stock prices may fluctuate in a range; Additionally, the likelihood of a CEO change next year will increase, and external recruitment is more likely than internal promotion.
