- Cavium Inc CAVM
- Cypress Semiconductor Corporation CY
- Intel Corporation INTC
- NVIDIA Corporation NVDA
- Integrated Device Technology Inc IDTI
- Advanced Micro Devices, Inc. AMD
- Adesto Technologies Corp IOTS
- Monolithic Power Systems, Inc. MPWR
- Maxim Integrated Products Inc. MXIM
- Silicon Motion Technology Corp. (ADR) SIMO
- Energous Corp WATT
- Rambus Inc. RMBS
Incrementally Confident On The Sector
Analyst Betsy Van Hees said she is incrementally more confident in her view that the significant amount of consolidation in the semiconductor industry, barring the memory industry, has led to a paradigm shift in the industry. The analyst sees a long-lasting reduction in fab capacity/supply, ongoing lean inventory levels and a more rational pricing environment, as more than 35 companies have essentially gone out of business due to M&A.
Citing comments from the companies, the analyst said the lead times were either stable or had increases, inventories remained lower and pricing was stable to up. The analyst also thinks the underlying demand trends and fundamentals across most end markets were healthy.
"We believe with strong underlying demand trends and no signals that the semiconductor cycle is peaking and/or overheating that the set up into Q4 2017 is positive," the analyst added.
Healthy End Markets To Benefit Cavium
Loop Capital said end-market demand trends remain healthy for Cavium. Accordingly, the firm expects the company to see meaningful year-over-year earnings and revenue growth in the second half of 2018.
The firm sees the recent pullback in Cavium shares as a buying opportunity.
Accordingly, the firm reiterated its Buy rating and $81 price target on the shares of Cavium.
Cypress 3.0 Is In Early Innings
The firm said it is increasingly confident that Cypress Semiconductor's Cypress 3.0 is in early innings. The firm sees upside to its estimates, as fourth quarter seemingly appears to be better-than-seasonal.
Citing its intact investment thesis and potential upside to its model, the firm reiterated its Buy rating and a $17 price target.
Impressed With Intel's Dominant Position
Loop Capital said it was impressed with Intel's dominant position in data center and technology leadership. The firm thinks investors do not appreciate that in a secular declining PC market, the company is able to offset the weakness with growth in data center, LTE modem and memory.
Accordingly, the firm sees upside to its recent quarterly results and full-year 2017 guidance.
Given its belief that Intel is transforming beyond being just a PC company, the firm reiterated its Buy rating and $45 price target.
Nvidia's Data Center Concerns Overblown
The firm suggested that it now believes concerns that data center growth has slowed and topped out were overblown, as the company shipped a material amount of Volta in the fiscal second quarter. Therefore, the firm expects data center to return to double-digit revenue growth in the fiscal third quarter.
- Integrated Device Technology: The firm thinks the IDTI story is intact, while it expects a reacceleration in growth in the second half of 2018 and into 2019. The firm maintained its Buy rating and $29 price target on the shares.
- Maxim Integrated: With Loop Capital's bus tour conducted around the mid-point of Maxim's fiscal first quarter, the firm now thinks the company's first-quarter guidance issued earlier was cautious. The firm, however, thinks, its investment thesis remains for Maxim is intact. The firm maintains its Buy rating and $53 price target on the shares of Maxim Integrated.
- Rambus: Loop Capital sees Rambus shares as undervalued when weighed against the fact that a large portion of its royalty and licensing revenue are fixed and committed long term. Furthermore, it has solid growth opportunities in the memory buffer and security businesses. The firm maintained its Buy rating and $16 price target on the shares of Rambus.
- Silicon Motion Technology: Premised on its expectations that the $200 million stock buyback will provide support and upside to the stock when the company begins to execute it, the firm maintained its Buy rating and $51 price target on the shares of the company.
That said, the firm continues to believe that NAND supply will unlikely improve until mid-2018.
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