Wall Street loves chip stocks as much as you love your new flat-panel TV.
Wall Street has a new love; who’s thin, smart, and fast. This romance is with the semiconductor chip. Now that you’re playing more games on your Razr and about to enjoy March Madness on your new flat screen TV, the sector's enjoying a rebound after suffering from a flood of chips in '06. With Texas Instruments issuing a business update on Monday, is there still fast money to be made in the fast chips?
Tim Strazzini says the semi cap equipment names and the semi-conductor chip and microprocessor names are working and they’re outperforming the NASDAQ. His favorites are the chip and the consumer electronic spaces.
Tim says the semi-cap equipment space is someplace to be long. Broadcom (BRCM),SanDisk (SNDK),Texas Instruments (TXN) and STMicroelectronics (STM) all are benefiting from expansion in the communications network and grid - and the expansion in the consumer electronic space. The cycle will probably be at its peak at the end of the year, or the beginning of ’08 and it’s starting to be discounted in these stocks.
Jon Najirian says National Semiconductor (NSM) beat expectations by two cents today and Morgan Stanley upgraded KLA-Tencor (KLAC), and that stock is going to run. Options traders are buying calls on that one like crazy. He’s says keep an eye on KLA - it’s going to be moving higher over the next several sessions.
Jeff Macke says the retailers don’t have pricing power in the big screen TV’s – but the chip guys do. He explains that pricing typically erodes from the consumer back to the chip people, but that erosion hasn’t happened yet in this space. It’s the retailers who are taking it on the chin and not getting the margin. The chip manufacturers are doing a little better.
Guy Adami says Tim is dead on and added that Advanced Micro Devices (AMD) is in trouble. Guy says Intel (INTC) has got it out for AMD ever since they won the account with Dell (DELL). Guy thinks Intel has a jones for AMD and they’re going to put this down to a 9 dollar stocks.
Jeff Macke says he likes Intel here and thinks they have to be benefiting from crushing AMD.
Dylan Ratigan says he has yet to sit at the desk and see a stock more criticized that AMD tonight.
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On MAR 9, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders.Najarian Owns (BA), (GS), (KLAC), (LVS), (LEH), (MSFT), (NE), (PDE), (STP) Is Short (HOG) Strazzini Owns (T), (YHOO), (BRCM), (SNDK), (TXN), (NSM) is short (HOG) On 1/25 Najarian owned (MSFT)