Nasdaq Heats up on Tech Rally
Today wasn't an all-time high for the Nasdaq, but there were plenty of investors who snapped up shares of semis and networking stocks. More than a few big cap techs posted multi-year highs on bullish predictions ahead of earnings, which kick off next week.
Chip stocks rallied, as Banc of America Securities analyst Sumit Dhanda raised Intel's price target to $29, calling for better-than-forecast second-quarter sales. Intel shares rose 5.8%, closing at $26, their highest level since Dec. 5, 2005. Memory chipmaker SanDisk climbed up 5.4% to $54.43, as Citigroup upped the price target to $62 from $52, on expectations that gross margins are improving. The positive calls helped curb semi supply glut fears.
"The pipeline's getting cleared out," said Art Hogan, chief market strategist at Jefferies.
"We're seeing strength in places we didn't expect. We didn't think Nintendo would sell out. We didn't think PlayStation would cut prices, but they did, and they're selling out." Hogan expects continued strength for semis through the rest of 2007. "They used to be an August play," he said. "We just started earlier this time."
Networking stocks were also stand-outs. Juniper Networks jumped 2.5%, as Stifel raised the target to $30 ahead of earnings. And shares of Cisco Systems, late to the recent tech rally, rose 3.6% to $29.80, the highest price since Feb. 15, 2001.
With cap-ex spending on the rise, some say they expect the rally to continue, particularly for Oracle, Cisco and Intel.