UBS downgraded NXP Semiconductors (NXPI) from Buy to Neutral on Monday.
The investment firm lowered its price target for the stock from $305 to $270.
NXP shares fell 2.8% in pre-market trading following the announcement.
Analysts warned of increasing risks regarding an inventory correction in China.
Demand in the Chinese automotive market has weakened since late 2025.
NXP reported significant revenue growth from China in the second quarter.
This growth could lead to an inventory correction by 2027.
UBS also noted NXP's limited exposure to Artificial Intelligence compared to its peers.
The firm's growth profile is considered less compelling due to this AI gap.