Wall Street had its worst day in 19 months last Thursday, with chip stocks leading the selloff. The Nasdaq Composite fell 5.52% to 24,315.00, its biggest one-day drop since the April 2025 tariff announcement. The S&P 500 fell 4.36% to 7,353.73, erasing about $3 trillion in market value and marking its worst day since that same tariff crash. The Dow lost 3.44%.
The Nasdaq is now in a correction, more than 10% below the record close it set last month. Volume was heavy: 26.9 billion shares changed hands, against a 20-session average of 17.7 billion.
Fear of Tighter AI Rules Hit Chip Stocks
The trigger was politics. Investors worried about tighter AI regulation after Democrats won control of Congress, including in states where opposition to new data centers has been growing. The Philadelphia SE Semiconductor index fell more than 12% in one session, its worst day since March 2020. Candidates in both parties had campaigned against AI data centers, Yahoo Finance’s Jared Blikre reported.
Melissa Brown, global head of investment decision research at SimCorp, said some newly elected members of Congress and governors want to slow the pace of AI infrastructure development, and that any slowdown would raise concerns. We covered the group’s earlier pullback in our list of oversold AI stocks that Wall Street analysts saw 50%+ upside in, published before the selloff.
A Partial Rebound, With Rate Hikes Still in View
Jed Ellerbroek, portfolio manager at Argent Capital Management, called Thursday “the capitulation phase for the data center capex beneficiary stocks” and said the size of the moves looked excessive. Chip stocks did bounce on Friday: the semiconductor index rose 4.2% and the Nasdaq gained 1.1% to 24,579.43, and the S&P 500 rose 0.32% to 7,376.86, while the Dow slipped 0.46% to 51,285.73. But the Nasdaq still posted its fourth straight weekly decline, down 3.4% for the week, while the S&P 500 fell 2.7%, its worst week since June, and the Dow fell 0.9%.
Readers weighing how far the technology sector has fallen can also look at our roundup of technology stocks trading near 52-week lows that analysts favor. Through Thursday’s close, the S&P 500 was still up 7.4% for 2026 and the Nasdaq up 4.6%. Friday’s jobs report showed employers added 165,000 jobs in October, against 59,000 expected, and the unemployment rate fell to 4.1%. Traders expect the Federal Reserve to raise interest rates next month, following a hike in September.
Our Methodology
To compile this list, we reviewed analyst ratings announced between November 1 and November 9, as reported by financial news sites. From the stocks that came up, we picked the 10 with the highest price target cuts, and ranked them in descending order of their average upside potential, as of November 9, 2026. We also list each stock’s number of hedge fund holders as of Q2 2026, from our database of 1,006 hedge funds.
At Insider Monkey, we are obsessed with what hedge funds do. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 612% since May 2014, beating its benchmark by 375 percentage points (see more details here).
Analysts Just Slashed Their Price Targets on These 10 Stocks
10. Qualcomm (NASDAQ:QCOM)
Average Upside Potential: 10%
Number of Hedge Fund Holders: 95
Barclays analyst Tom O’Malley kept a Sell rating on Qualcomm on November 5 and cut his price target to $150 from $180 because he projects handset revenue falling 26% in fiscal 2027. TD Cowen, the same day, stayed at Buy but lowered its target to $185 from $200, citing weaker gross margins and supply limits.
The cuts followed Qualcomm’s earnings report. Adjusted earnings per share were $2.17 for the quarter. Total revenue fell about 7% to 8% to roughly $10.4 billion, handset revenue fell 26% to about $5.1 billion, and guidance of $2.15 to $2.35 per share for the December quarter came in below the $2.27 analysts expected. The stock dropped about 9.5% the next day.
Qualcomm makes the Snapdragon chips used in many smartphones, and its newer businesses are growing. Automotive revenue rose 89%, management is targeting $5 billion in data center revenue for fiscal 2027, and an Amazon agreement is worth up to $60 billion over 10 years. We looked at how that growth is running into the handset slump in our analysis of its automotive business and handset earnings.
9. Adobe (NASDAQ:ADBE)
Average Upside Potential: 12%
Number of Hedge Fund Holders: 81
Citi analyst Tyler Radke downgraded Adobe to Sell from Neutral on November 4 and cut his price target to $207 from $250. He sees Wall Street’s fiscal 2027 growth estimates as too high and expects a weaker forecast when Adobe reports fourth-quarter results next month. Industry data, he says, show pressure from AI tools and from small-business customers. He also thinks changes to the creative business under Anil Chakravarthy, who takes over as CEO at the same time, could hold back short-term growth, and Citi thinks the shift toward user growth through AI products like Firefly, instead of price increases, could take about 200 basis points off fiscal 2027 growth in annual recurring revenue.
The shares rose about 1% on the day of the downgrade, but they’re down about 31% so far this year. Adobe makes Photoshop, Illustrator and Acrobat, and the pressure Citi describes comes from AI tools competing with that software.
The other side of the argument is that the stock now looks cheap after that drop. We covered it in our piece on Adobe’s low earnings multiple and whether the AI fear is overdone.
8. Advanced Micro Devices (NASDAQ:AMD)
Average Upside Potential: 30%
Number of Hedge Fund Holders: 164
BofA lowered its price target on AMD to $650 from $720 on November 4, even though it raised its 2027 and 2028 earnings estimates. It cited “the recent contraction in sector multiples,” so the business outlook improved while the multiple it will pay for chip stocks fell. Mizuho kept an Outperform rating the same day but cut its target to $610 from $705, the largest cut we found among the major firms.
The business itself is growing quickly. Revenue was $13.4 billion, up 45%. AMD’s data center sales rose 97% last quarter to $8.5 billion, which is 64% of total sales. Adjusted earnings per share of $2.09 beat the $1.95 analysts expected, and CEO Lisa Su said she expects revenue to grow more than 80% in 2027. The stock still fell about 17% in the chip selloff that followed, even though BofA was raising its earnings estimates at the same time.
AMD sells processors for PCs and servers along with AI accelerators. We wrote about its premium valuation in our piece on how execution looks under the microscope at that price.
7. Microchip Technology (NASDAQ:MCHP)
Average Upside Potential: 45%
Number of Hedge Fund Holders: 81
Truist maintained a Hold on Microchip Technology on November 6 and cut its price target to $62 from $90. The same day, Evercore ISI analyst Mark Lipacis lowered his target to $75 from $117. The notes point to the same two problems: supply limits and a reset in expectations after the quarter.
Those calls followed the company’s latest report. Sales grew 42.2% from a year earlier and beat the company’s own guidance, but guidance for the December quarter was $1.573 billion to $1.638 billion, and the stock fell about 10% the next day. CEO Steve Sanghi said AI customers have absorbed foundry and packaging capacity, so lead times on standard parts now run as long as 32 weeks, against a normal four to eight. About $53 million of that quarter’s sales came from one-time items, which explains part of the step-down in guidance.
Microchip makes microcontrollers for cars, factory equipment and appliances, and data centers are a minority of its sales. Its Hailo acquisition and edge AI push are covered in our look at why it is buying edge AI on the cheap.
6. Atlassian (NASDAQ:TEAM)
Average Upside Potential: 47%
Number of Hedge Fund Holders: 48
Truist analyst Miller Jump kept a Buy rating on Atlassian but cut his price target to $200 from $250. He said strong first-quarter execution was “overshadowed by cautious guidance,” and he questioned how durable cloud growth and margins will be as AI investments scale. He now models cloud growth settling in the low-to-mid 20% range over time. Wells Fargo stayed at Overweight on November 6 and lowered its target to $200 from $270.
Both cuts followed the outlook. Atlassian forecast fiscal 2027 revenue of $7.5 billion, above the $7.4 billion analysts expected, and its adjusted operating margin of 32% beat the 28.6% expected. But it guided cloud growth to 27% next quarter from 30.5%, and fiscal 2027 subscription ARR growth of about 18.5%, versus 23% in the first quarter. The stock fell about 16%. Truist still pointed to renewals, pricing and seat expansion as near-term supports.
Atlassian’s Jira and Confluence tools help software teams plan and track work. Our analysis of its valuation and AI bet looks at whether new AI features can carry growth as the older business slows.
5. Coinbase (NASDAQ:COIN)
Average Upside Potential: 49%
Number of Hedge Fund Holders: 62
Morgan Stanley analyst Michael Cyprys downgraded Coinbase to Underweight from Equal Weight on November 2 and cut his price target to $120 from $258. “Confidence in the earnings recovery has deteriorated,” he wrote, since trading, which drives most of Coinbase’s earnings, looks set to recover more slowly than he expected.
Third-quarter revenue fell 35% from a year earlier, and October activity put fourth-quarter transaction revenue on pace to land at roughly $607 million, 11% below what analysts expected. He also cited uncertainty after a security breach at rival exchange Binance, which he said could weigh on confidence in centralized crypto platforms. He cut his 2027 revenue forecast by 28% and his 2028 forecast by 18%, lowered his adjusted EBITDA estimates by 47% and 25% for those years, and described the outlook as a less pronounced recovery than before. Coinbase shares fell about 4% that day.
Cyprys still ranks Coinbase among the best-positioned crypto platforms, so his objection is about earnings and valuation, not execution. How the company is leaning on institutions as retail activity weakens is covered in our analysis of its shift toward institutional clients.
4. Arm Holdings (NASDAQ:ARM)
Average Upside Potential: 52%
Number of Hedge Fund Holders: 52
Barclays analyst Tom O’Malley, who keeps an Overweight rating on Arm, cut his price target to $325 from $360 on November 5. He pointed to the company’s new AGI CPU, a hardware product with lower margins than licensing, which lowers his earnings estimates. TD Cowen, still at Buy, went to $250 from $350, citing progress on procurement and supply chain for the same chip.
Both firms still rate the stock positively, at Overweight and Buy. The calls followed Arm’s earnings, where revenue hit a record $1.44 billion. Licensing sales rose 50% to $773 million and royalty revenue rose 8% to $670 million, but the outlook failed to beat expectations, and the stock fell about 14%.
Arm designs the processor architecture that other companies license, and the AGI CPU is its move into selling a chip of its own, which is why both firms are adjusting their margin and supply assumptions. Earlier this fall the stock jumped 17% after Arm set a $2 billion revenue goal. Our earlier coverage of the rally after its $2 billion revenue goal shows how sentiment has shifted since.
3. Coherent (NYSE:COHR)
Average Upside Potential: 81%
Number of Hedge Fund Holders: 105
Rosenblatt analyst Mike Genovese kept a Buy rating on Coherent on November 5 and cut his price target to $400 from $500. He blamed lower sector multiples rather than the business; his new target is about 26 times fiscal 2028 earnings. He sees demand as secure: calendar 2027 is essentially booked, customers are already ordering into 2028, and long-term agreements run through the end of the decade. Craig-Hallum analyst Richard Shannon also stayed at Buy that day but cut his target to $310 from $480. Both firms kept their Buy ratings, so the changes are to price targets, not to their views of the company.
Coherent reported fiscal first-quarter results this week, and the cuts followed. Revenue rose 50% to $2.37 billion and second-quarter guidance ran from $2.55 billion to $2.75 billion. The stock still fell about 13% the next day.
Coherent, based in Saxonburg, Pennsylvania, makes the lasers and optical components that carry data inside AI data centers, along with products for communications and industrial customers. We asked whether the shares look reasonably priced in our look at Coherent’s valuation.
2. Lumentum (NASDAQ:LITE)
Average Upside Potential: 85%
Number of Hedge Fund Holders: 111
B. Riley analyst Dave Kang downgraded Lumentum to Neutral from Buy on November 3 and cut his price target to $770 from $1,142, citing limited upside under the deal terms. Before the deal, B. Riley had named Lumentum its top AI optics pick because its capacity was sold out through 2029. Stifel made the same move that day, downgrading to Hold from Buy and lowering its target to $806 from $1,232, also over the merger terms.
Both notes make the same point. Marvell’s $115 billion all-stock deal to buy Lumentum gives each Lumentum share 4.5 Marvell shares at a fixed ratio, and the deal isn’t expected to close until 2028. Until then, Lumentum’s stock tracks Marvell’s price instead of its own results. B. Riley’s note put the implied value at 4.5 times Marvell’s $171 share price. Marvell shareholders would own about 67% of the combined company, and the deal carries a $3.2 billion termination fee, about $35 per Lumentum share.
Lumentum makes the lasers and optical parts used in AI networks. Our piece on whether its valuation can hold up as demand outruns supply looks at the company before the deal.
1. Marvell Technology (NASDAQ:MRVL)
Average Upside Potential: 110%
Number of Hedge Fund Holders: 96
BofA analyst Vivek Arya downgraded Marvell to Neutral from Buy on November 3 and cut his price target to $225 from $400. He said the all-stock deal to buy Lumentum “comes as a considerable surprise,” since an analyst day last month made no mention of a deal this large. He argues that about $1 billion of cost savings can’t offset a roughly 50% rise in share count, and he flags a long stock overhang, a regulatory process in China and customer conflicts. His new target uses 20 times calendar 2028 earnings, down from 33 times, because sector multiples have contracted.
TD Cowen analyst Sean O’Loughlin made the same downgrade that day, to Hold from Buy, with a target of $175 down from $350. He adds that consensus expects a larger optical market in 2027 than TD Cowen does, so if the cycle turns, Lumentum’s operating leverage could worsen the dilution.
Marvell designs chips that move data inside data centers. Our look at what the few analysts who won’t buy it predates the deal. The deal would give Marvell shareholders about 67% of the combined company, and it is expected to close in the first half of 2028.
READ NEXT: Marvell (MRVL) Raises Its 2028 Revenue Target to $20 Billion. Can Growth Justify the Premium?and Coherent (COHR) Could Benefit From AI Networking Even if CPO Adoption Takes Time
