QCOM - KeyBanc cuts estimates on Nvidia AMD others as firm sees semi correction 'looming'

Investment firm KeyBanc Capital Markets lowered estimates on several semiconductor companies, including Nvidia ( NASDAQ: NVDA ), Advanced Micro Devices ( NASDAQ: AMD ) and Intel ( INTC ), noting that a correction in the semiconductor industry is "looming."

Analyst John Vinh noted that after looking at the supply chain, the firm's findings were "mixed, but mostly negative," as it was disrupted by the China lockdowns and weak consumer demand hurt sales of PCs, smartphones and internet-enabled products, though auto, industrial and cloud demand remained "robust."

Additionally, the analyst said that easing lead times suggest a correction is "looming" sometime in the second half of the year.

"In terms of stock conclusions, our findings are negative for Nvidia, Advanced Micro Devices, Ambarella, Skyworks Solutions, Synaptics, Intel and Broadcom," Vinh wrote in a note to clients.

Estimates and price targets were cut on Nvidia ( NVDA ), AMD ( AMD ), Skyworks Solutions ( SWKS ) and Synaptics ( SYNA ). Intel ( INTC ), Qorvo ( QRVO ) and Qualcomm ( QCOM ) had estimates cut, while Ambarella ( AMBA ) lost sales from Rivian ( RIVN ) and Broadcom ( AVGO ) was impacted by a loss in switching market share.

Delving deeper, Vinh lowered the price target on Nvidia ( NVDA ) to $230 but kept the firm's overweight rating, even as the analyst believes gaming could decline 20% sequentially in the third quarter due to worries over inflation, a slowdown in crypto mining and a push-out of the ramp of the RTX40 GPU.

Regarding Advanced Micro Devices ( AMD ), Vinh cut the price target to $130, citing "excess gaming GPU inventory," as well as slowing PC demand.

Conversely, Marvell ( MRVL ) is likely to benefit, as it sees continued strength from cloud and gains in the switching market.

Separately on Tuesday, investment firm Citi cut its estimates on Nvidia ( NVDA ) related to gaming, but said its strength in the data center is still "intact."

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