We recently published an article titled These 10 Companies Led Monday's Downturn. In this article, we are going to take a look at where Semtech Corp. (NASDAQ:SMTC) stands against the other stocks.

Wall Street's major indices kicked off the trading on a positive note, all finishing in the green territory, as investors brushed off fears of growing global trade tensions.

The Dow Jones rose by 0.38 percent, the S&P 500 grew 0.67 percent, while the Nasdaq rallied 0.98 percent.

However, 10 companies defied a broader market optimism, mostly due to a series of stock rating downgrades from investment research companies on the back of poor earnings guidance and dismal earnings performance.

To come up with Monday’s worst performers, we considered only the stocks with at least $2 billion in market capitalization and $5 million in daily trading volume.

A technician looking at a circuit board of analog semiconductor products.

Semtech Corp. (NASDAQ:SMTC)

Semtech Corp. nosedived 31.02 percent on Monday to close at $37.6 apiece as investors sold off on news that Nvidia Corp. was pulling back support for a server rack configuration that used SMTC’s cable products, and that NVDA is coming out with a new processing unit and may be making the change to address overheating issues.

According to SMTC, it now expects sales of its CopperEdge products, which are used in copper cables, to be lower than the $50 million floor it previously targeted for fiscal year 2026.

Benchmark analyst Cody Acree said that NVDA’s decision was in line with its commitment to prioritize its resources to ensure a smooth generational transition to a system that was mired with overheating issues.

However, Acree believes that the news would not be as devastating to the company's business as initially indicated in the soft after-market trading.

Overall SMTC ranks 1st on our list of Monday's worst performers. While we acknowledge the potential of SMTC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as SMTC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

 

Disclosure: None. This article is originally published at Insider Monkey.