Shares of Nvidia Corp. dropped 3.1% in premarket trade Tuesday, after Pacific Crest turned bearish, citing concerns that the graphics chip maker may have already captured so much of the available market that growth could become a problem. Analyst Michael McConnell cut his rating to a rare underweight from sector weight. He doesn't have a price target on the stock. McConnell said he is concerned about "signs of desktop [graphics processing unit] market saturation, lower margins from incremental Nintendo Switch revenue and a possible pause in the company's datacenter business this summer." An underweight rating at Pacific Crest means the stock is expected to underperform its peers over the next six to 12 months. Only 13 of the 702 companies covered by the firm (1.9%) are rated underweight. After more than tripling in 2016, the stock has tacked on just 1.5% year to date through Monday. In comparison, the PHLX Semiconductor Index has run up 11% so far this year and the S&P 500 has gained 5.4%.
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