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Updated from 9:16 a.m. EDT

Applied Micro Circuits


was down sharply after

SG Cowen

cut it to buy from strong buy, in part because

TheStreet Recommends



is a major customer.

The firm also cited Applied Micro's valuation.

Applied Micro was recently down $56.06, or 28%, to $142.25. The company's shares closed yesterday at $198.31.

Nortel's shares were hammered in after-hours trading Tuesday, following the company's third-quarter earnings report. Nortel posted earnings that beat analysts' estimates by a penny but reported revenue that disappointed Wall Street.