If you own stock in Intel Corp. (INTC) or Advanced Micro Devices Inc. (AMD), get out, said Drew Peck, semiconductor analyst at SG Cowen. Although Intel may get through the fourth quarter, Peck thinks that next year, "the first quarter is going to look ugly."
"One way or the other, we've got a big problem with the biggest semiconductor of all, and with AMD, with whom it competes," Peck told CNBC in an interview Monday. "The net effect of this may have a psychological impact on the rest of the semiconductor stocks, even though they're starting to look cheap."
Though the semiconductor sector faces cyclical and fundamental issues, such as processor prices dropping for the foreseeable future, Peck says he sees component companies having "a nice rebound in the second quarter of next year."
His picks include Analog Devices Inc. (ADI), Cirrus Logic Inc. (CRUS) and Transmeta Corp. (TMTA).
Jim |
