Story updated at 9:55 to reflect market activity.
NVIDIA fell -2% to $18.55 in morning trading.
The chipmaker's margins seem to be at risk according to analysts Michael McConnell and Hans Chung.
"Concurrent with high-end desktop GPU oversupply, we believe NVDA has increased Quadro sell-in targets (70%+ gross margin) to 10-15% q/q growth for FQ2, well above sell-through forecasts of 3-5% q/q growth, raising risk of excess inventory exiting this quarter," the analysts wrote. "NVIDIA's capital return strategy seems to be running out of gas due to low domestic cash and the end of Intel cash payments in 1Q16. Based on our SOTP analysis, a Tegra mobile exit also appears priced into NVDA at current levels."
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Separately, TheStreet Ratings team rates NVIDIA CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate NVIDIA CORP (NVDA) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, reasonable valuation levels, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."