Applied Micro Circuits shed 9 3/4, or 5 percent, to 194 7/16 Tuesday after PaineWebber cut the chipmaker from a "buy" recommendation to an "attractive" rating.
It and other chip stocks were beaten down after US Bancorp/Piper Jaffray analyst Ashok Kumar cut Intel (Nasdaq: INTC) from a "strong buy" rating to a "buy," citing expectations for weaker sales for the company.
Applied Micro Circuits (Nasdaq: AMCC) watched its stock soar to a 52-week high of 210 3/16 last week.
In its latest quarter, AMCC posted a profit of $27.9 million, or 21 cents a share, on sales of $74.2 million.
First Call Corp. consensus expects it to earn 23 cents a share in its second quarter and 96 cents a share in the fiscal year.
Twelve of the 13 analysts tracking the stock rate it either a "buy" or "strong buy."