Shares of NVIDIA Fall 4.2% Following Canaccord's Downgrade

In a report published Wednesday, Canaccord Genuity analyst Bobby Burleson downgraded shared of

from Buy to Hold and maintained a $16.00 price target. Burleson commented, "While NVDA is likely to deliver top line growth in C14 based on Tesla, Tegra (lowered C13 base), and autos, we believe there is limited potential for upside to our estimates. Multiple expansion is also likely to be tepid for NVDA as investors begin to warm to the group, given the stock's premium to its most relevant comps (BRCM, INTC, MRVL, QCOM). We do not believe a more cautious rating is warranted given Tesla and automotive are likely to deliver strong enough growth to offset some headwinds that persist for PCs (notebook graphics in particular). " The analyst expects Tesla's revenues to reach roughly $275 million in C14. Canaccord noted that Tesla's gross margin is above corporate average at approximately 80% and sees strong growth. Burleson added, "Autos offer another bright spot for the company." NVIDIA closed at $16.36 on Thursday and shares are currently trading as low as $15.70, down 4.2%.