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Strategies & Market Trends : Technical analysis for shorts & longs
SPY 680.59+0.6%Dec 19 4:00 PM EST

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To: Johnny Canuck who wrote (43096)2/22/2006 8:49:22 PM
From: Johnny Canuck  Read Replies (1) of 69161
 
Market Scan
of ATI Seen Making Recovery In Graphics Chips
Maya Roney, 02.22.06, 5:54 PM ET

UBS Investment Research analyst Robert Dennison maintained a "buy" rating on ATI Technologies and raised the price target to $22 from $20 in anticipation of new chipset announcements and earnings upside in the near future.

"We view ATI as the recovering player in the graphics semiconductor industry," wrote the analyst in a research report Wednesday.

After a difficult 2005 where its next-generation chip R520 was delayed, ATI wrote off $65 million in inventory, leaving the GeForce 6 and 7 families from Nvidia to enjoy much success.

However, with the recent successful launch and reception of ATI's R580, Dennison believes the R520 stumble is behind the company and that R520/580 architecture is a sound platform for further growth.

The analyst sees greater potential for earnings upside from ATI, with gross margins in the high 20% level versus Nividia's 40%. He expects new chipset architecture from ATI in early fall 2006.
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