Huida CEO Huang Renxun's affair and the national security scandal spread to Wall Street ratings. On November 11, U.S. brokerage Baird lowered its rating on Huida from "outperform" to "neutral" and cut its target price from $500 to $200.CNBC According to reports, the reasons are the uncertainty about whether Huang Jensen can be renewed and the possible slowdown in AI capital expenditures by large cloud players.

On the same day, Morgan Stanley removed Huida from its preferred stock list, and Bank of America also removed Huida from its "US 1 List" recommendation list. Huida's stock price closed at $168.89 on Tuesday and rebounded after the opening on Wednesday. At 10:18 ET (23:18 Taiwan time), it was trading at $172.70, up 2.26%.

Baird estimates new H200 ban could bring $5 billion in writedowns

Baird analyst Tristan Gerra predicted in a report that the United States may impose a new ban on H200 chip exports to China. "We believe there is currently a small amount of shipments entering Asian warehouses, and some inventory is waiting for demand in China, which may result in a write-down of US$5 billion," he wrote.

Gerra also expects the U.S. to impose new export restrictions targeting vulnerabilities in Southeast Asian data centers, and the Department of Justice may also take action against Huida's partner Megaspeed; Megaspeed has previously been under scrutiny due to concerns that it transferred chips to China. For background, seePrevious reports。

He believes that chip demand in the United States can fill the gap in the Southeast Asian market, but there is no guarantee that the timing will be right: "The revenue impact may be concentrated in a certain quarter, and cloud companies with tight cash flow will not be able to take over in the same quarter."

Cloud capital expenditures are expected to increase by only 40% in 2027

Baird’s second concern is AI infrastructure needs. Gerra estimates that AI capital expenditures by large cloud players will increase by about 40% annually in 2027.ReutersAccording to reports, Baird believes that the reason is supply constraints and early signs of slowing demand.

Gerra said some of the doubts are already reflected in the stock price, but "the best-case scenario is that the stock price is consolidating in a range until the dust settles." according to Quartz Citing a report from Bloomberg, Baird will maintain a neutral rating until the federal investigation is concluded, the financial impact and related costs can be quantified, and Huang's role is clear.

Reuters quoted the Baird report as saying: "The probability of CEO handover will continue to increase before 2027, and we believe that the probability of external CEO recruitment is higher than internal promotion." For the discussion of Huida's successor candidates, seeRelated reports。

Morgan Stanley: Huang Renxun’s leadership is crucial to the company’s direction

Morgan Stanley only named Huida as a top stock on October 2, and the stock has since fallen by more than 25%. Analyst Joseph Moore remains bullish on Huida, but wrote in a report: "Short-term uncertainty will continue as Huang's leadership is critical to the company's strategic direction."

Bank of America analyst Vivek Arya's report on Tuesday laid out three scenarios: the impact is controlled and leadership continues; uncertainty is prolonged, suppressing valuations ahead of earnings; and the situation escalates, with "adverse findings, leadership changes, or tighter restrictions, requiring a reassessment of earnings." Reuters reported that at least three brokerages including Wells Fargo and Citigroup also lowered their target prices earlier this week.

Only 3 out of 64 analysts have no BUY rating

Downgrades are rare for Huida. CNBC quoted LSEG data and found that among the 64 analysts tracking Huida, only 3 gave it a "hold" or "underperform" rating. Quartz cited Bloomberg statistics showing that about 94% of analysts gave the stock a buy rating.

Huida's shares hit a year-high of $243.37 on October 6 and had fallen about 31% at Tuesday's close; Bloomberg pointed out that Huida was heading for a sixth consecutive week of declines, the longest losing streak since October 2012.

Huida has hired law firm Wachtell Lipton to investigate whether company secrets or U.S. national security were affected, and the board of directors said there is currently no indication that the secrets were leaked. Three Republican chairmen of the House of Representatives committee asked Huang to attend a closed briefing on November 18, seePrevious reportsHuida is scheduled to announce its third-quarter financial results after the U.S. stock market closes on November 17.

this article Huida suffered a rare downgrade: Baird cut its target price to US$200, and Morgan Stanley also removed it from its top pick first appeared in Chain News ABMedia。