Financial Associated Press (Shanghai, editor Zhao Hao) news, Monday (April 11) U.S. stock market, Nvidia shares fell sharply, now down more than 5%, at $219 per share. Pre-market investment bank Baird downgraded Nvidia's rating from "outperforming" to "neutral" and slashed its price target, citing concerns about order cancellations.
Baird analyst Tristan Gerra lowered Nvidia's price target from $360 per share to $225, a margin of $135. Gerra pointed out that some consumers have begun to cancel Nvidia's orders, and the company may face "excess inventory".
Gerra noted that the slowdown in global demand for personal computing devices (PCs) and the suspension of sales efforts in the Russian market could hurt the company more than the market currently believes.
On Monday, preliminary results from IDC's Quarterly Global Personal Computing Device Tracker report showed that global shipments of traditional PCs, including desktops, laptops and workstations, fell 5.1 percent in the first quarter of 2022, beating previous forecasts.
Graphics cards are an important part of the PC, and Nvidia's flagship product, the graphics processing unit (GPU), is a chip on the graphics card. In a report late last month, Gerra said graphics card resellers' revenues have been "below seasonal revenue" since December last year, with the market price for GPUs in March down 25% month-on-month and price levels back to early 2021.
Gerra also pointed out that factors such as the sale of hardware by cryptocurrency miners have also put pressure on graphics card prices, exacerbating weak demand. Nvidia's peer AMD was also affected by this, and as of press time, AMD's stock price fell more than 3%.
In addition, Gerra stressed that the trend of NVIDIA's data center business remains "very strong" and is likely to peak year-on-year revenue in the first half of 2022, while game-related revenue is likely to be weak for the rest of the year.
Baird is not the only one who has a turnaround attitude towards the GPU industry. On Friday, investment bank Truist lowered its price targets for Nvidia, AMD and Intel, telling investors it had found "hard evidence of order cuts."
Analyst William Stein said he understands a "sudden negative shift" in demand from many manufacturers and that "while the semiconductor industry's first-quarter results are likely to remain strong, a turning point will begin in the second half of this year and 2023." ”
Stein lowered its Nvidia price target from $347 to $298, AMD from $144 to $111, and Intel from $53 to $49.