Zillow’s CEO Sees “Durability.” Here’s Why KeyBanc’s Sergio Segura Still Downgraded Zillow (ZG) Farooq Tue, November 10, 2026 at 5:23 PM EST 4 min read Z -5.51% ^IXIC -0.74% ^GSPC -0.38% Trade Z on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
We just published a list of the 10 Stocks Analysts Just Downgraded and Zillow Group (NASDAQ:ZG) ranked 6th on this list.
Wall Street has had a rough start to November. The Nasdaq Composite fell 5.52% on November 5, its steepest one-day drop in 19 months, and slid into a correction, more than 10% below its October 6 record close. The semiconductor index lost more than 12% that day, and about $3 trillion in value was erased from S&P 500 companies.
Fear of tighter rules on AI drove much of the rout. Democratic wins in the November elections raised concerns that stricter regulation could slow the buildout of AI infrastructure, and the stocks tied to data centers took the hardest hit. Investors who had been paying up for AI growth suddenly had to ask how much of that growth could be stopped by politics.
Not everyone saw the drop as a verdict on the AI trade. Jed Ellerbroek of Argent Capital Management described the selling as a capitulation phase for data center beneficiaries, meaning forced selling that often marks a low. A Wall Street research shop, Yardeni, argued that political pushback on data centers amounts to "speed bumps, not roadblocks, even though Wall Street seems to be pricing in the latter."
The economy did not offer a cushion. Payrolls rose by 165,000 in October, far above the 65,000 to 70,000 economists expected, and the unemployment rate stood at 4.1%. That kept a December rate hike in play, and Cleveland Fed President Beth Hammack and Richmond Fed President Thomas Barkin have both hinted that higher rates could be on the table.
Our ranking of oversold AI stocks where Wall Street analysts see 50%+ upside looks at the corner of the market that sold off the most.
On Monday, strategists led by Beata Manthey cut US stocks and the global technology sector to neutral and raised European stocks outside the UK to overweight. Manthey warned that positioning in stocks "could reset lower into net-short territory." The S&P 500 had its biggest weekly loss since April 2025, which helps explain why many investors are looking for cheaper places to put money. You might also be interested in our list of affordable stocks Wall Street analysts like.
Stocks bounced back on Monday. By midday, the Dow was up about 2%, the S&P 500 about 2.3%, and the Nasdaq about 2.6%. Inflation data due later this week is the next big test for the market and for the Federal Reserve's rate path, and analysts have kept reshuffling their ratings as the numbers move.
Zillow made it to our list because it has an average upside potential of 24%. KeyBanc analyst Sergio Segura downgraded Zillow Group to Sector Weight from Overweight on November 9, citing the challenges of the housing market and the company's sensitivity to interest rates. Zillow runs the home-search and rental marketplaces where many Americans look for their next place to live, and its core business is slipping. Residential revenue fell 4% to $419 million, while mortgages revenue rose 32% to $70 million and rentals revenue jumped 26% to $220 million.
The mix explains the split view. Bears see a housing market that stays stuck and a business that leans on interest rates. Bulls see revenue that still grew 7% to $724 million overall, with rentals and mortgages growing fast enough to offset the weakness at the top. Chief Executive Officer Jeremy Wacksman said "Q3 highlighted Zillow's durability." Investors are watching whether the newer businesses can keep growing fast enough to make up for a residential segment that is shrinking, and Segura's downgrade suggests he is not convinced yet.
Our piece on the restructuring and headwinds hiding behind Zillow's strong beats looks at what the bears are watching.
While we acknowledge the risk and potential of SAP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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