From Briefing.com
12:01 ET ******
Chip Stocks : Despite posting generally strong earnings numbers, the chip and chip equipment stocks took a beating last week... That's why earnings season is also called the silly season... You see stocks often react more to expectations and trends than to actual results... Given that the chip sector had enjoyed tremendous gains (year-to-date), investors used the news of good results as reason to bank some profits... The desire to take profits and reduce exposure to the sector was also fueled by lingering concerns that the industry upturn is running on its last legs... Concerns that were given new life by a slight slowing in the industry book-to-bill ratio... Consequently, even if Q2 numbers are/were good, traders nervous that the sector will have a tough time matching that growth in out quarters... While there is no denying that the upturn won't last forever, there has also been little in the reports (to date) to suggest that industry growth is about to slow anytime soon... To the contrary, most companies offered generally upbeat forecasts for future growth... This makes sense given that the sector is heading into what is normally a very strong seasonal period... With many of the stocks having experienced significant setbacks in recent days/weeks now seems like a good time to do some selective buying... Briefing.com not alone in this thinking as evidenced by today's gain in Altera (ALTR 113 15/16 +3 15/16), Intel (INTC 141 1/8 +2 151/6), Applied Materials (AMAT 81 5/8 +3 1/2), Transwitch (TXCC 88 1/4 +3 3/4), Alpha Industries (AHAA 39 11/16 +2 3/16), KLA-Tencor (KLAC 53 5/8 +3 3/16), Kulicke & Soffa (KLIC 49 1/16 +2 5/16) and Texas Instruments (TXN 66 1/4 +2 3/4)... The latter company is scheduled to report results after today's close... Other chip companies due to report results this week include LSI Logic (LSI 48 1/2 +15/16), Linear Tech (LLTC 62 3/16 +2), PRI Automation (PRIA 57 15/16 +3), Lam Research (LRCX 28 1/16 +1 13/16) and KLAC... Look for their results to lend further support to the view that all remains well with the sector. -- Robert Walberg, Briefing.com |
