Nvidia falls again as analysts at once loved the stock
Shares in Nvidia fell 1 percent in the premarket Tuesday, adding the steep losses from the previous increase, as several analysts bailed on the chip maker after a dire sales warning.
Analysts at Morgan Stanley and Needam downgraded the shares Another analyst at Bank of America Merrill Lynch removed it from his list of best ideas.
Nvidia dropped 13.8 percent on Monday, the worst one-day performance since November 16, after the company slashed its fourth-quarter revenue guidance to $ 2.2 billion from $ 2.7 billion. In a statement, Nvidia said "worsened macroeconomic conditions, especially in China. , has impacted consumer demand for NVIDIA gaming GPUs ", a key business segment for the company.
" Lacking this quarter in poor performance indicates more significant challenges than we had anticipated, given that this is still a medium / high end channel field quarter, " said analyst Joseph Morgan Stanley Moore, in a note Tuesday. "This becomes a show me story with lower P / E assumptions."
Moore downgraded Nvidia to equal weight from obesity and slash owed its share price at $ 1[ads1]48 per share from $ 220. The new target puts an increase of 7.2 percent from Monday's $ 138.01. His old price target meant an upside of 59.4 percent.
Nvidia became the latest technology company that attributed a cut in sales expectations to a decline in China. Earlier this month, Apple cut the revenue guidance for the first quarter last year, referring to a weakening economy in China and weaker than expected iPhone sales.
For Nvidia, China has historically been a major market for graphics, Needam analyst Rajvindra Gill said in a note Tuesday. "While NVDA does not break out its specific Chinese gaming exposure, desktop gaming is hugely popular in China and a large market for NVDA. Worsening conditions in the Chinese economy have negatively affected the purchase of graphics cards, especially high-end RTX GPUs." [19659003] Gill downgraded Nvidia to underperform buying, and adding the stock may fall to $ 100 or lower. "
Timothy Arcuri, analyst at UBS, upgraded Nvidia to buy from neutral on the back of the decline in sales. In a note to clients on Tuesday, Arcuri said the stock down" finally set the stage for a new positive audit cycle that starts this summer. "
CNBCs
Michael Bloom
contributed to this report.
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