Dec. 3 -- Shares of Altera Corp. and Xilinx Inc., rival makers of chips for communications devices, rose amid optimism that they and other semiconductor companies will see improved sales and reduced costs.
Altera rose 1 5/16 to 54 3/8, earlier touching a 52-week high of 58 3/4. Xilinx climbed 3/8 to 56 13/16 after touching a record 61 1/4. Both companies are based in San Jose, California.
Prudential Securities analyst Hans Mosesmann boosted his rating on
Xilinx and raised his price target on Altera, citing strong demand for
chips used in networking devices and optimism for sales in the first and second quarters, which are seasonally strong for programmable logic chips. Xilinx and Altera both make the chips, which are used in
communications gear like switches. ''There is a lot of pent-up demand
for their products,'' said Timothy Kellis, an Adams Harkness & Hill
analyst. Altera and Xilinx have been guiding estimates up anyway, he
said. ''The feeling is that the semiconductor sector has bottomed out.'' He rates both companies' shares ''attractive.''
Mosesmann raised his rating on Xilinx to ''accumulate'' from ''hold.''
He boosted his expectations for Altera shares to $65 from $50 and held
his rating at ''accumulate.''
Semiconductors ''Both Xilinx and Altera also said they had very good
Novembers and semiconductors in general are seeing a confluence'' of
good news, said Maria Quillard, Xilinx director of investor relations.
On Tuesday, Xilinx Chief Executive Willem Roelandts told selected
analysts and investors at a Credit Suisse First Boston technology
conference in Scottsdale, Arizona, that under the right circumstances
products made by Xilinx, Altera and other programmable chip makers could see growth rates of 30 percent to 40 percent, Quillard said. ''But that won't be happening next year,'' Quillard added.
Daniel Niles, a BancBoston Robertson Stephens analyst, reiterated his
''buy'' rating on Altera, while BancBoston RS analyst Elias Moosa
reiterated his ''buy'' rating on Xilinx.
Niles said Altera and Xilinx lead his ''best picks'' for midcap stocks
and that both companies have ''the best potential for accelerated
earnings growth powered by new sets of products.'' He also has ''strong buy'' ratings on chip makers Intel Corp., Texas Instruments Inc. and Micron Technology Inc. |
