Nvidia Corp. (NVDA:US) fell the most in 11 months after Evercore Partners Inc. downgraded the maker of graphics processors to underweight from equal-weight, saying 2013 will be “challenging” for the company.
Nvidia dropped 5.4 percent to $13.28 at the New York close, the biggest decline since Oct. 3. The stock (NVDA:US), which had risen 1.2 percent this year through Aug. 31, was among the Standard & Poor’s 500 Index’s biggest losers today.
Nvidia has bet on its Tegra mobile processor to boost revenue, winning orders from Google Inc. (GOOG:US) and Microsoft Corp. (MSFT:US) as they push into the tablet market. Nvidia, based in Santa Clara, California, could come under competitive pressure as Apple Inc. (AAPL:US) prepares to introduce new versions of the iPad, wrote Evercore analysts led by Patrick Wang, in a note to clients today.
“If Tegra-based tablets are unable to gain traction against Apple, Nvidia could be faced with an inventory glut in the coming months,” the Evercore analysts wrote.
Additionally, Mountain View, California-based Google may switch from using Nvidia’s Tegra 3 chip to Samsung Electronics Co.’s Exynos 5 in its Nexus 10 tablet, according to the note.
Chris Caso, an analyst with Susquehanna International Group, also downgraded Nvidia’s shares today to neutral from positive, saying that recent checks indicate a “sharp slowdown” in third-quarter notebook builds.
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