Shares of Nvidia Corp. fell the most in six months Tuesday 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 on the Nasdaq Stock Market, according to unofficial closing figures, the biggest intraday decline since Feb. 16. The stock, which had risen 1.2 percent this year through Friday, was among the Standard & Poor’s 500 Index’s biggest losers Tuesday.
Nvidia has bet on its Tegra mobile processor to boost revenue, winning orders from Google Inc. and Microsoft Corp. as they push into the tablet market. Nvidia, based in Santa Clara, California, could come under competitive pressure as Apple Inc. prepares to introduce new versions of the iPad, wrote Evercore analysts led by Patrick Wang, in a note to clients Tuesday.
“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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