Nvidia's Stock Sinks After Instinet Swings To Rare Bearish Stance

By Tomi KilgoreMarketsMarketWatch Pulse

Shares of Nvidia Corp. sank 4.3% in premarket trade Thursday, after Instinet swung from bullish to bearish on the graphics chip maker, citing concerns over a slowdown in gaming. Analyst Romit Shah downgraded Nvidia to a rare reduce rating from buy, and slashed his stock price target to $90, which is 19% below Wednesday's closing price of $110.76, from $100. Only 5% of the companies covered by Instinet were rated reduce through Wednesday. "We believe consensus is underappreciating a slowdown in gaming and the potential negative impact to the multiple," Shah wrote in a note to clients. He recommended investors take profits on their Nvidia stock and rotate into Intel Corp. . Intel's stock ticked up 0.2% in premarket trade. Shah said that in addition to Nvidia's stock trading at a "significant premium" to its peers, "investors should recognize that the market's enthusiasm for Nvidia's emerging businesses is historically shortlived." Nvidia's stock has more than tripled over the past 12 months, while Intel shares have rallied 25%, the PHLX Semiconductor Index has soared 64% and the S&P 500 has climbed 23%.

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