Weak shipments of Microsoft's HoloLens device are hurting Himax, says Nomura. Image source: Microsoft.
What happened
Shares of Himax Technologies, Inc. (HIMX +1.54%) were down 16.4% as of 12:30 p.m. EDT Monday after an analyst downgraded the fabless semiconductor company.
So what
More specifically, Nomura's Donnie Teng today lowered his rating on Himax from "buy" to "neutral," and simultaneously reduced his per-share price target from $12 to $10.20.
Recall Nomura previously upgraded shares of Himax in July, citing the potential for the company to benefit from virtual reality and augmented reality (AR) products, particularly including the roles of its components inside Microsoft's HoloLens headset.
"But according to our checks recently," the Nomura note states, "the potential upside may be offset by the weaker shipments for the major AR device, as more meaningful volume for the device may not take off until the second half of 2017."
Now what
To be fair, Teng did admit in his initial upgrade that both virtual and augmented reality technology could have a "bumpy" start. And in the end, that's par for the course for investors looking to capitalize on emerging industries through components suppliers like Himax. That's why I think investors would be wise to focus on the long-term stories of their respective companies for now, and largely ignore big price swings that come as a result of the fast-changing, short-term opinions of Wall Street.
