A Wall Street analyst on Thursday called a cyclical bottom for chipmakers tied to personal computers and smartphones. He upgraded Intel stock along with Qualcomm and Skyworks Solutions.
Susquehanna Financial Group analyst Christopher Rolland raised his rating on Intel stock to neutral from negative. Plus, he upgraded Qualcomm and Skyworks to positive from neutral.
"We believe the acute portion of the semiconductor downcycle for the handset, PC and consumer end markets has passed," Rolland said in a note to clients. He added that the industrial and automotive chip markets have yet to correct.
Rolland predicted that inventory levels soon will normalize and demand will pick up in the PC and handset markets. He sees PC restocking opportunities for Intel starting in the third quarter. In handsets, Qualcomm is likely "within a quarter or so of (inventory) balance," Rolland said.
"That said, we will wait for Part II of this upgrade, which will include industrial, auto and broad-based stocks, at a later date," he said.
Intel Stock, Other Chip Stocks Rise
On the stock market today, Intel stock jumped 6.2% to close at 30.18. Qualcomm stock advanced 4.4% to 120.51. Skyworks stock increased 3.6% to 115.73.
Elsewhere in semiconductor stocks, Advanced Micro Devices extended its breakout on Thursday. The PC and server chipmaker saw its shares rise 7.7% to close at 96.60. On Wednesday, AMD stock broke out of a flat base with a buy point of 89.04, according to IBD MarketSmith charts.
AMD has outperformed rival Intel stock lately, thanks to market share gains.
The Philadelphia semiconductor index, known as SOX, popped 4.1% higher on Thursday. Year to date, it is up 22.4%. That compares with a 3.2% rise for the S&P 500 index. The SOX includes the 30 largest semiconductor stocks traded in the U.S.
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