By Cecily Fraser, CBS MarketWatch
Last Update: 6:39 PM ET May 18, 1999 Movers & Shakers
Earnings Headlines
NEW YORK (CBS.MW) -- Shares of Broadcom shot ahead 8 percent Tuesday after Morgan Stanley Dean Witter raised its price target on the shares to $120 from $95, saying that chipmaker's products could be in greater demand.
Shares of Broadcom, which makes chips for high-speed data transmission, rose 7 5/8 to 98 3/8 with over 4 million shares changing hands.
Analyst Mark Edelstone said that AT&T's acquisition of MediaOne and Microsoft's $5 billion investments in AT&T raises his confidence that Broadcom's (BRCM: news, msgs) integrated circuits will continue to be rapidly used.
"We believe AT&T is likely to remain ambitious with its deployment of advanced voice, data, and video services, which we believe will serve as an additional catalyst for the deployment of cable digital set-top boxes utilizing Broadcom's ICs," the analyst said in a note to clients.
The company is on track to introduce integrated set-top box ICs in the second half of this year, Edelstone added.
The analyst also said that Broadcom has garnered additional new product design wins in the LAN market.
The company's plan to acquire Epigram will further Broadcom's position in the home networking market, he said.
Edelstone also said that he expects the cable modem market to more than double for each of the next three years, and sees Broadcom maintaining a "dominant market share."
The analyst reiterated an "outperform" rating on the shares.
Cecily Fraser is a reporter for CBS MarketWatch.
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