In this article, we discuss the 5 tech stocks recently downgraded by analysts. If you want to see some more tech stocks receiving updated recommendations from analysts, go directly to Analysts are Downgrading These 10 Tech Stocks.
5. Semtech Corporation (NASDAQ:SMTC)
Number of Hedge Fund Holders: 27
Semtech Corporation (NASDAQ:SMTC) received downgrades from a number of research firms on Thursday, September 1, 2022, after it issued a gloomy outlook for its fiscal third quarter. As a result, the stock lost over 27 percent of its value in the previous trading session.
Cowen analyst Matthew Ramsey lowered his ratings for Semtech Corporation (NASDAQ:SMTC) from “Outperform” to “Market Perform,” citing weak Q3 guidance. Ramsey added that the ongoing economic slowdown, particularly in China, is resulting in softer demand trends. He also cut his price target for Semtech Corporation (NASDAQ:SMTC) from $65 per share to $43 per share.
In addition, Oppenheimer downgraded Semtech Corporation (NASDAQ:SMTC) from “Outperform” to “Perform,” while B. Riley cut its price target for the stock from $63 to $53 on September 1.
4. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 35
Shares of HP Inc. (NYSE:HPQ) slid nearly two percent on Thursday, September 1, 2022, after Loop Capital reduced its ratings for the famous PC maker from “Buy” to “Hold,” citing signs of slowing commercial sales.
Loop Capital Analyst Ananda Baruah also referred to the acquisition of Poly, saying the integration would increase HP’s costs and debt. Baruah also cut his price target for HP Inc. (NYSE:HPQ) from $50 per share to $29 per share.
The downgrade came a couple of days after HP Inc. (NYSE:HPQ) delivered mixed results for its fiscal third quarter and lowered its earnings outlook for its fiscal year 2022.
3. GitLab Inc. (NASDAQ:GTLB)
Number of Hedge Fund Holders: 36
Shares of GitLab Inc. (NASDAQ:GTLB) plummeted nearly 16 percent on Thursday, September 1, 2022, after JPMorgan slashed its ratings for the software solutions provider from “Overweight” to “Neutral,” citing its higher valuation.
Analyst Pinjalim Bora said the valuation of GitLab Inc. (NASDAQ:GTLB) is the second highest in the software space. Bora, who has a price target of $63 per share for GitLab Inc. (NASDAQ:GTLB), thinks the stock’s risk/reward is fairly balanced at the moment.
Earlier this year, asset management firm Baron Funds, discussed GitLab Inc. (NASDAQ:GTLB) in its first-quarter 2022 investor letter, stating:
“While not highlighted in our top purchases, this quarter we also initiated a position in GitLab Inc. (NASDAQ:GTLB) GitLab provides a software development and IT operations (DevOps) platform that developers, product managers, IT operations teams, and security professionals use to collaborate throughout the software development lifecycle. For developers, the GitLab platform addresses the planning, creation, verification, testing, and deployment of code. Once code is shipped into production, IT operations professionals can use GitLab to continuously protect and monitor code and identify any issues or bugs for further updates. The GitLab platform helps more than 15,000 customers reduce time to market for new applications, automate continuous feature updates, reduce security vulnerabilities, and retain developer talent. GitLab is the only end-to-end DevOps platform that addresses all stages of the software lifecycle using a single codebase and unified data model, giving it a competitive advantage over point solutions. GitLab employs an open-source model, which has led to viral adoption among 30 million developers. More than 2,600 of these developers are active contributors to GitLab’s product, enabling the company to release upgrades much faster than competitors. These consistent product enhancements have led to low churn and strong expansion in GitLab’s existing customer base, driving a best-in-class 150%-plus dollar-based net retention rate (a measure of current customer average growth, where a value over 100% equals positive growth).”
2. Western Digital Corporation (NASDAQ:WDC)
Number of Hedge Fund Holders: 43
Shares of Western Digital Corporation (NASDAQ:WDC) hit a new 52-week low of $40.38 on Thursday, September 1, 2022. The drop came after Benchmark lowered its ratings for the hard disk drive maker from “Hold” to “Sell,” citing its weak outlook.
Last month, Western Digital Corporation (NASDAQ:WDC) issued disappointing financial guidance for its fiscal first quarter. Western Digital Corporation (NASDAQ:WDC) guided for adjusted earnings in the range of 35 – 65 cents per share and revenue between $3.6 – $3.8 billion. The forecast was significantly lower than the consensus of $1.88 per share for earnings and $4.75 billion for revenue.
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 84
Daiwa downgraded NVIDIA Corporation (NASDAQ:NVDA) from “Outperform” to “Neutral” on Friday, September 2, 2022. Analyst Louis Miscioscia pointed towards weak results and recent restrictions on chip sales to China.
Miscioscia was also moved by the high valuation of NVIDIA Corporation (NASDAQ:NVDA). He cut his price target for the graphics processors maker from $215 per share to $133 per share.
The downgrade came a day after the U.S. government restricted NVIDIA Corporation (NASDAQ:NVDA) from selling specific high-performance chips to China. NVIDIA stock fell nearly eight percent on Thursday, September 1, following the restrictions.
Meanwhile, Cathie Wood’s ARK Innovation took advantage of the drop and bought $32 million worth of shares in NVIDIA Corporation (NASDAQ:NVDA) on September 1.
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