Nvidia shares were slammed on Monday after analysts cut estimates on the stock on concerns that rivals were gaining steam.
The company was down 2.8 percent, or 40 cents by mid-day trading on NASDAQ stock exchange.
Uche Oriji of UBS reiterated his Neutral rating on the stock, and cut his price target to $16.50 from $20, after predicting that the company would sell less graphical processing units (GPUs) in the quarter than preciously expected.
GPU's are outfitted in computers and other devices to control the display. They are also Nvidia's core product, but increasing competition from rival Advanced Micro Devices and a slowing overall sales poses to encroach on Nvidia's growth and market share.
Oriji believes Nvidia's GPU sales will be down 2 percent from quarter to quarter, as "potential notebook share gains should support a smaller loss decline than AMD."
The concern stems from AMD's announcement last week noting that it "just hit record revenue and record unit shipments last quarter," and expected more growth in that part of the business.
He's now modeling $553 million in GPU sales in Q2, down from $564
More significantly, Orji thinks the competition for Nvidia's Tegra chip --the GPU for mobile devices --could crimp the company's sale of the processors in 2013.
Major customers and smaller rivals are ratcheting up price pressures on Nvidia. Google has chosen Texas Instruments to power the reference design of its next Android phone , for instance.
Additionally, TI's competing chip for mobile graphics -- the OMAP -- is seeing speeds of 1.8 Ghz from the 1.5 its predecessors got, which might force Nvidia to spend resources to match.
Orji's full-year revenue estimate for the year drops to $4.16 billion from a prior $4.22 billion and earnings-per-share drops to $1.09 from $1.11.