We just published a list of the 10 High-Profile Stocks Just Dumped by Top Analysts and International Flavors & Fragrances (NYSE:IFF) ranked 7th on this list.
Wall Street had one of its roughest sessions of the year this week. The Nasdaq Composite fell 5.52% on November 5, its deepest one-day drop in 19 months, Reuters reported that day. The index closed more than 10% below its October 6 record, which confirmed a technical correction.
The S&P 500 slid 4.36% and the Dow Jones Industrial Average lost 3.44%, wiping about $3 trillion off the value of S&P 500 companies.
The Philadelphia SE Semiconductor index plunged more than 12%, and trading volume reached 26.9 billion shares, well above the 20-session average of 17.7 billion. Chipmakers and other AI-linked stocks took the brunt of the damage.
Fears of AI Regulation Hit Chip Stocks Hardest
The trigger was politics. Democrats won control of Congress in Tuesday's elections, including in states where opposition to new data centers has grown. Investors worried that tougher rules could slow the buildout of AI infrastructure, according to the Reuters report.
Melissa Brown, global head of investment decision research at SimCorp, said any slowdown would raise concerns because AI growth has leaned on rapid construction of supporting infrastructure. Jed Ellerbroek, a portfolio manager at Argent Capital Management, said, "This feels like the capitulation phase for the data center capex beneficiary stocks," though he thinks the size of the moves is outsized.
The drop followed a strong run. The S&P 500 had posted its biggest one-day gain in three months the day before, and it is still up 7.4% for the year. We recently rounded up ten stocks you are selling and insiders are buying .
A Hot Jobs Report Revives Rate-Hike Bets
Friday's jobs report did little to calm nerves. Employers added 165,000 jobs in October, more than twice what economists expected, and the unemployment rate edged down to 4.1%, Reuters reported on November 6.
Traders raised their bets on a Federal Reserve rate hike in response. Markets priced about a 78% chance of a quarter-point increase at the central bank's December 8-9 meeting, up from about 67% on Thursday, and they now expect a final hike in April rather than June. For a look at the other side of the analyst picture, see our ranking of affordable stocks Wall Street analysts like .
Cleveland Fed President Beth Hammack and Richmond Fed chief Thomas Barkin had already hinted at possible future rate hikes, Reuters reported on November 5. Fed Chairman Kevin Warsh said last month that policymakers would watch the accumulation of data to decide whether more tightening is needed. Fitch Ratings analyst Olu Sonola said "the economy remains on firm footing" despite recent AI-related concerns, while Raymond James analysts wrote that they expect the Fed to raise rates by 25 basis points in December.
IFF has a market cap of $20.69 billion and an average upside potential of 19% based on analysts' average price target, and had 39 hedge fund holders in Q2 2026.
BofA cut International Flavors & Fragrances to Underperform from Buy on November 6 and lowered its price target to $91 from $95. The bank said the shares had risen substantially and lack near-term catalysts, making further upside hard to achieve, and it pointed to softness in businesses outside Taste. BofA also expects raw material inflation of about 3% to limit operating leverage into the first half of 2027. It called the third quarter strong but said the risk/reward has shifted as margin pressure builds.
The report itself had plenty of growth in it. Third-quarter net sales were $1.94 billion, up 4%, and adjusted operating EBITDA of $403 million beat BofA's own estimate of $398 million. Health & Biosciences grew by only 1%, the slowest of the company's three segments. IFF also raised the low end of its 2026 sales outlook, which is now $7.5 billion to $7.6 billion.
The company is reshaping its portfolio too. The sale of its Food Ingredients business is on track to close by the end of the second quarter of 2027, and IFF has finished its share repurchase authorization, which it had set at $500 million.
While we acknowledge the risk and potential of IFF as an investment, we believe certain AI infrastructure stocks offer far stronger long-term potential at a much more attractive entry point. If you are looking for an AI stock more promising than IFF that operates as a critical AI tollbooth and stands as the most important company in the world, check out our report about this must-own AI stock .
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This article is originally published at Insider Monkey .
