Despite shares of NVIDIA falling nearly 2%, a rally in other semiconductor stocks led to a slight but successful uptick in the Philadelphia Semiconductor Index.
On Friday, the semiconductor index on the New York Stock Exchange recorded 5656.31 points, up 0.08% from the previous trading day. This was due to the rally in other semiconductor stocks, despite NVIDIA’s plunge. Nvidia dropped by 1.91% to close at $125.83, but gains in other semiconductor stocks offset this decline, helping the overall index to finish higher.
The downgrade was due to a Wall Street investment firm’s decision. New Street Research’s analyst Pierre Ferragu lowered Nvidia’s rating from buy to neutral, citing limited upside potential after a significant price rise.
Ferragu explained the downgrade, saying, “NVIDIA has risen as much as it can,” warning that “if second-half results fall short of expectations, the stock could plummet.” It is unusual to assign a neutral rating to NVIDIA, which is leading Wall Street’s AI rally. According to Bloomberg, 90% of analysts researching NVIDIA are assigning a “buy” rating to the stock.
However, as NVIDIA fell, other semiconductor stocks saw gains, including its competitor AMD as it surged by 4.88%. Intel rose 2.53%, Qualcomm 0.95%, and Taiwan’s TSMC also gained 0.82%. As a result, the semiconductor index rose, successfully closing the day.
