Has Huida hit bottom after falling below the $200 mark? Analysts see it this way

Analysts believe Huida's share price may be about to hit bottom. (Reuters photo)

[Financial Channel/Comprehensive Report] AI indicator stock Huida fell 9.3% on Thursday (5th) to close at US$181.60, the largest single-day decline since January 2025, and the first time it closed below US$200 since July 30. Huida's stock price has fallen to its lowest point in nearly three months, but analysts believe the chip company's recent performance indicates that its stock price may be about to hit a bottom.

"Barron's" reported that according to Dow Jones market data, Huida's market value evaporated by US$446.6 billion (approximately NT$14.72 trillion) on Thursday, which was the second largest single-day decline in the company's history, second only to the single-day market value of US$593 billion (approximately NT$19.55 trillion) on January 27, 2025.

Huida's decline came just as the Democratic Party's victory in the midterm elections triggered a massive sell-off in technology stocks. This sell-off once again ignited people's concerns about the prospects of AI construction. The Nasdaq index fell 5.5% on Thursday, the largest single-day decline since April 4, 2025.

Mike Townsend, manager of legislative and regulatory affairs at Charles Schwab, said Democrats on Capitol Hill may push legislation that would slow the data center boom and force companies to shoulder the cost of power and water infrastructure upgrades.

Huida's customers such as SpaceX and CoreWeave will bear the brunt of the direct impact of data center delays, which investors worry will ultimately lead to reduced chip purchases.

But analysts believe the market's immediate reaction to Huida's stock may have been too much. The chipmaker forecast revenue growth of 70% in fiscal 2028, essentially the same as its 2027 forecast, and said growth was limited by supply rather than demand. Any delays to the data center plans could mean the chips will be resold to other customers, either in the United States or overseas.

Will Denyer, chief U.S. economist at Gavekal, said that the United States is a vast country, so if the new governor really makes it impossible to build new data centers, then these technology companies are expected to look elsewhere to build factories. There will always be some states or counties willing to welcome data centers and the tax revenue that comes with them.

In addition, Huida's valuation is also worthy of attention. According to FactSet data, Huida's current expected price-to-earnings ratio is about 14 times. Although its growth prospects are much better than those of ordinary companies and it has conducted large-scale share repurchases, overall it is still far lower than the 18.45 times price-to-earnings ratio of the S&P 500 index.

UBS strategist Keith Parker wrote in a report that the economic slowdown is negative for semiconductors and AI infrastructure, but the valuation of the semiconductor industry is close to multi-year lows and many negative factors have been priced into the market. In addition, positions in the semiconductor industry have also been significantly reduced.

The retracement of Huida's stock price is nothing new. Since it broke through $200 in April, the stock price has fallen below this level many times, but has never fallen below $190. It usually shows an upward trend in the weeks before the quarterly report is released. Huida's latest financial report is scheduled to be released on November 17.

In the coming weeks, Wall Street should release preview reports of Huida's financial reports, which may set a new average target price for Huida's stock price. According to FactSet data, the average target price of the stock is currently $333.