From Briefing.com: Updated: 21-Feb-03 - General Commentary - Over the past couple of days, the influential semiconductor industry has received notable upgrades from Morgan Stanley and Merrill Lynch. As a result, the Philadelphia Semiconductor Index (SOX) has gained all of about two points. The power of Wall Street!
While Briefing.com wouldn't go so far as Merrill and call valuations in the industry "reasonable," we do agree that the worst is probably over for the chip stocks - at least for the foreseeable future. Does that mean the group is ready for a big reversal? Probably not. But as you can see from the chart, the SOX is at an inflection point.
If SOX can break above its 50-day moving average of 298 on a closing basis, would be an early sign that broad tech sector positioning for a near-term bounce. Scope of that recovery is likely to prove limited, at least until investors get more clarity on Iraqi situation, but decisive break of this key technical level would suggest that near-term bias will shift from negative to positive.
Nasdaq chart looks similar to that of SOX. Tech-heavy index needs to get above its 50 (1362) and 200 (1380) day moving averages in order to break the near-term bearish cycle. Failure to do so will reinforce sellers and put a quick end to any recovery effort. However, break of this outer barrier would be a very positive intermediate-term signal.
So as we await news on the war front, investors will want to keep a close eye on these technical developments.
Robert Walberg, Briefing.com
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4:46PM Ingram Micro tops estimates; updates guidance (IM) 10.05 Unch: Reports Q4 (Dec) earnings of $0.19 per share, $0.01 better than the Multex consensus of $0.18; revenues fell 4.1% year/year to $5.89 bln vs the $5.83 bln consensus; Q1 sales are expected to range from $5.40 billion to $5.55 billion, with net income ex items ranging from $0.14 to $0.16 per diluted share -- Multex consensus estimates are $0.17 per share and $5.57 bln respectively.
3:14PM National Semi upgraded at Piper Jaffray (NSM) 15.29 +0.91: -- Update -- USB Piper Jaffray upgrades to Outperform from Mkt Perform based on their belief that the co's planned sale of its information appliances biz will enable it to focus more on its key strengths in analog and vertical mkts; in addition, the co's cost initiatives will further streamline the business and improve its profitability. Target is $21.
1:55PM Pacific Crest on the Intel Developer Forum : Pacific Crest says that nothing particularly new has come out of INTC's developer forum regarding GigE; firm thinks INTC's new processor line will give the co more share of their addressable mkt, which will likely come at the expense of AMCC, PMCS, and BRCM; also, firm says there could be upside to their MRVL ests in 2H03 since they don't see INTC coming out with their own competing product until Q4.
1:27PM Marvell rebounds intraday (MRVL) 19.70 +1.40: -- Update -- Stock has spiked over the past 15 minutes from $18.75 to a high of $19.74. Surge in price apparently related to comments at Developer Conference by Intel that there are no new developments in its relationship with Marvell. (see 10:02 comment)
11:40AM Above 200-Day : Major names crossing above their 200-day moving average today include XLNX, VSEA, CTMI, EXC.
11:05AM National Semi to cut 5% of workforce; selling information appliance unit (NSM) 15.24 +0.86:
11:17AM Atmel (ATML) 1.78 +0.03: WR Hambrecht initiates HOLD. Target $2.7. Based on firm's valuation analysis.
11:15AM SanDisk (SNDK) 17.74 +0.58: WR Hambrecht initiates BUY. Target $20. Cites expectation that SNDK will be a strong player in the flash memory card market, and its ability to diversify into other markets such as handsets and Wi-Fi cards.
10:30AM Rambus also benefits from CNET article (RMBS) 15.39 +1.51: -- Update -- Another factor being mentioned on RMBS is a CNET story detailing the demise of the Advanced DRAM Technology consortium, which had been created by Intel and several major memory manufacturers to develop DRAM technology that would compete with Rambus. The fact that this group has disintegrated is probably less important than it appears; its precursor JEDEC still exists, and the key issue remains Rambus's lawsuits against the other memory manufacturers.
10:19AM Rambus spikes on rumors (RMBS) 15.64 +1.76: A slew of rumors hitting RMBS; one is that they will be acquired by Infineon (IFX 6.89 +0.15) which has pulled back on this rumor; another is that an Intel-backed potential competitor has failed; RMBS is also at the Intel Developer conference today. With so many rumors flying, it's a good bet that none of them are true.
10:11AM RMBS spikes 18% on heavy volume :
10:02AM Marvell could see impact from Intel Gig-E product in second half - Solly (MRVL) 18.59 +0.29: -- Update -- Salomon Smith Barney says that INTC discussed its plans for a potential replacement for MRVL's Gig-E product at their developer forum; firm says this development could start to negatively impact MRVL by 2H03, and is not yet reflected in their model or consensus ests; also, firm remains cautious on MRVL's hard drive component biz for the April qtr due to seasonal and channel inventory factors.
9:42AM Asian handset makers challenged NOK/MOT: Fechtor : Hearing that research firm Fechtor Detwiler writes this morning about talk out of the GSM Congress in Cannes that second-tier Asian handset manufacturers (Sanyo, Sharp, NEC, Panasonic, Sony) are competing effectively with NOK and MOT for high-end handsets with consumer electronics (camera, radio, color screen); Fechtor says that high quality and low prices from these Asian firms could be a long-term negative factor for NOK and MOT.
9:30AM Qualcomm: China Unicom numbers disappoint; buy weakness --Cowen (QCOM) 34.99 -0.55: -- Update -- SG Cowen believes that QCOM can still make its total CDMA handset target for 2003, despite lower than expected subscriber additions by China Unicom. Firm notes that Jan was expected to be slow. Also says its discussions with China Unicom confirmed that CDMA handset subsidies ended in Jan.
8:57AM Cabot Micro may not win TSM deal (CCMP) 45.64: We are hearing that boutique firm BlueFin Research says it appears that TSM has selected JSR Micro for both their Cu Step 1 and Step 2 slurry process for their next-generation 90nm designs, which should begin to ramp in 2H03; according to firm, TSM's current incumbent for the 130nm design is CCMP.
7:58AM AMD "winding up" relations with UMC - Dow Jones (UMC) 3.14: Dow Jones reports that AMD indicated it may not build a joint-venture plant with UMC in Singapore as planned; however, an official at UMC denied that there was any change in their relationship with AMD.
7:43AM Cymer upgraded to Neutral from Sell at Merrill Lynch on valuation (CYMI) 32.72: Sees fair value at $37.50. (See also firm's semi upgrades at 7:32.)
7:32AM Merrill Lynch shifts to slightly positive stance on Semis : --Impact Call-- Merrill Lynch upgrades the following Semiconductor names to BUY from Neutral: AGR.A, ISIL, MRVL, MXIM, SMTC, TSM, XLNX. Firm believes that valuation is reasonable, if not highly attractive, while low inventory levels and low capital spending will tend to increase the industry's sensitivity to any improvement in demand. Firm also upgrading several stocks to Neutral from Sell: AMCC, ADI, BRCM, CNXT, INTC, PMCS, VTSS.
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