In this article, we will take a look at the 10 tech stocks recently downgraded by analysts. If you want to see some other tech stocks receiving updated recommendations from analysts, go directly to Analysts are Downgrading These 5 Tech Stocks.
Notable stocks from the tech sector, including HP Inc. (NYSE:HPQ), NVIDIA Corporation (NASDAQ:NVDA) and Western Digital Corporation (NASDAQ:WDC), were recently downgraded by analysts. HP Inc. (NYSE:HPQ) and Western Digital Corporation (NASDAQ:WDC) received the downgrades primarily due to their weak outlook.
On the other hand, a couple of tech stocks received price-target cuts despite their upbeat earnings and guidance. For instance, Truist trimmed its price target for Broadcom Inc. (NASDAQ:AVGO) from $658 per share to $630 per share on Friday morning, even though the semiconductor giant easily surpassed financial expectations for its fiscal third quarter. Moreover, Broadcom Inc. (NASDAQ:AVGO) issued a solid sales outlook for the current quarter, calling for revenue of about $8.9 billion versus analysts’ average estimate of $8.77 billion.
Many other tech companies, including C3.ai, Inc. (NYSE:AI) and GitLab Inc. (NASDAQ:GTLB), also received downgrades from analysts. Check out the full article below to see the reasons behind the revised ratings for these stocks.
Image by Sergei Tokmakov Terms.Law from Pixabay
10. VNET Group, Inc. (NASDAQ:VNET)
Number of Hedge Fund Holders: 14
Shares of VNET Group, Inc. (NASDAQ:VNET) slipped over one percent on Thursday, September 1, 2022, after Credit Suisse downgraded the Chinese data center services provider from “Outperform” to “Neutral,” following its second-quarter results.
Credit Suisse analyst Clive Cheung was primarily moved by the company’s weak sales outlook for the full year. Cheung doesn’t see strong growth visibility in the near term. He cut his price target for VNET Group, Inc. (NASDAQ:VNET) from $7.20 per share to $5.90 per share.
VNET Group, Inc. (NASDAQ:VNET) recently released its Q2 results. While the company met expectations for the quarter, it issued a softer sales outlook for 2022. VNET expects to generate revenue in the range of 7.25 – 7.55 billion yuan for the full year.
9. C3.ai, Inc. (NYSE:AI)
Number of Hedge Fund Holders: 17
Needham lowered its ratings for C3.ai, Inc. (NYSE:AI) from “Buy” to “Hold” on Friday, September 2, 2022. C3.ai, Inc. (NYSE:AI) recently announced a consumption-based pricing model. However, Needham analyst Mike Cikos thinks switching to the new model is challenging and time-consuming.
The downgrade came a day after C3.ai, Inc. (NYSE:AI) lowered its sales guidance. The company expects revenue in the range of $60 – $62 million for the current quarter, below analysts’ average estimate of $71.7 million.
Shares of C3.ai, Inc. (NYSE:AI) lost nearly 20 percent of their value on Thursday, September 1, 2022, following the weak outlook.
8. Infosys Limited (NYSE:INFY)
Number of Hedge Fund Holders: 24
JPMorgan lowered its ratings for Infosys Limited (NYSE:INFY) from “Overweight” to “Neutral” last week. Analyst Ankur Rudra believes India’s IT sector would continue to experience margin pressure in the medium term amid inflation.
Meanwhile, India’s leading IT firms, including Infosys Limited (NYSE:INFY), are reducing employee bonuses as their customers are tightening their budgets due to recession concerns.
According to recent reports, Infosys Limited (NYSE:INFY) has cut the variable salary portion of its staff. The variable portion is a part of the total pay package in many Indian firms and depends on the performance of individuals.
7. Seagate Technology Holdings plc (NASDAQ:STX)
Number of Hedge Fund Holders: 25
Shares of Seagate Technology Holdings plc (NASDAQ:STX) fell to a nearly 16-month low on Thursday, September 1, 2022, after Benchmark slashed its ratings for the data storage company from “Buy” to “Hold.” Analyst Mark Miller believes lingering economic weakness could result in lower spending from data center customers.
The downgrade came after Seagate Technology Holdings plc (NASDAQ:STX) reduced its outlook for the first quarter, citing cautious spending from enterprise customers. The company now expects to generate revenue of about $2.1 billion, well below analysts’ average estimate of $2.52 billion.
Like Seagate Technology Holdings plc (NASDAQ:STX), analysts also revised their ratings and price targets for NVIDIA Corporation (NASDAQ:NVDA), Western Digital Corporation (NASDAQ:WDC) and Broadcom Inc. (NASDAQ:AVGO).
6. Ambarella, Inc. (NASDAQ:AMBA)
Number of Hedge Fund Holders: 27
Shares of Ambarella, Inc. (NASDAQ:AMBA) fell for two straight days after receiving a downgrade from Summit Insights on Wednesday, August 31, 2022. Summit analyst Kinngai Chan was moved by the near-term risks for Ambarella’s IoT business.
Several other research firms also reduced their price targets for Ambarella, Inc. (NASDAQ:AMBA) on August 31. For instance, Stifel lowered its price target for Ambarella from $100 to $94, while KeyBanc slashed its price target from $120 to $100.
The latest coverage from analysts came after Ambarella, Inc. (NASDAQ:AMBA) reported a drop in its fiscal Q2 earnings along with a weak outlook. The fabless semiconductor design company projected revenue of $81 – $85 million for the current quarter. The midpoint of the guidance was below the expectations of $85 million.
Earlier this year, investment management firm Carillon Tower Advisers mentioned Ambarella, Inc. (NASDAQ:AMBA) in its first-quarter 2022 investor letter, stating:
“Ambarella (NASDAQ:AMBA) supplies video processing and computer vision chips used in the security and automotive markets. The company continues to face supply headwinds from its foundry partner despite robust market demand for Ambarella’s products.”
Click to continue reading and see Analysts are Downgrading These 5 Tech Stocks.
Suggested articles:
- 10 Stocks Analysts Are Downgrading After Weak Earnings Reports
- 10 Stocks That Billionaire Philippe Laffont Is Selling
- 10 Social Media Stocks Getting Hammered
Disclosure: None. Analysts are Downgrading These 10 Tech Stocks is originally published on Insider Monkey.
