HARDWARE STOCKS
Communications chips get connected
By Chris Kraeuter, CBS.MarketWatch.com
Last Update: 10:17 AM ET May 23, 2003
SAN FRANCISCO (CBS.MW) -- Semiconductor shares were mixed in morning trading on Wall Street Friday, as makers of communications chips shined in the wake of Marvell Technology's upbeat business outlook.
The Philadelphia Semiconductor Index ($SOX: news, chart, profile) added 0.6 percent while the Goldman Sachs Hardware Index ($GHA: news, chart, profile) edged up 0.5 percent.
Hardware stocks were mostly weak and little changed, but Research In Motion (RIMM: news, chart, profile) and Emulex (ELX: news, chart, profile) stood out to the upside. RIM gained 9 percent to $20.09 - a one-year high - while Emulex added 4.5 percent to $21.35.
Marvell Technology Group (MRVL: news, chart, profile) added 14 percent to $31.40. The company, which makes chips used in data storage and broadband communications products, boosted late Thursday its fiscal second quarter and full-year revenue projections. See full story.
"We are now even more encouraged that the balance of the year will be better for us," said Marvell Chief Executive Sehat Sutardja. "We have seen additional improvements in our large customer base."
Even thought the company said its sales growth is due to market share gains, the stocks of competitors rose.
Broadcom (BRCM: news, chart, profile) added 6 percent to $22.12, Intersil (ISIL: news, chart, profile) gained 3.7 percent to $21.62, Anadigics (ANAD: news, chart, profile) rose 3.5 percent, and others rose about 2 percent.
Also, CIBC initiated coverage of Intersil with a rating of "sector performer."
In other investment banking actions, Bear Stearns began coverage of the global semiconductor industry with "market weight" ratings on Intel (INTC: news, chart, profile), Micron (MU: news, chart, profile), AMD (AMD: news, chart, profile), Nvidia (NVDA: news, chart, profile), and ATI (ATYT: news, chart, profile), a "peer perform" rating on Taiwan Semiconductor (TSM: news, chart, profile), and "outperform" rating on Samsung.
Analyst Gurinder Kalra highlighted a "tepid cyclical recovery" and continued weak pricing power.
"The good news is that the worst average selling price declines are over and 2004 looks significantly better than 2003 from a supply perspective," Kalra said in a note to clients. |
