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5 Chip Stocks To Watch Are Moving Up, With Apple’s Big Event March 21

A basket of top-rated chip stocks are making moves around buy points now, with several moving up in Friday trading. And Apple ( AAPL ), a big user of semiconductors, just sent out press invitations for a March 21 event where it’s expected to introduce a small iPhone and another iPad. So which chip stocks are highly rated by IBD and get at least some of their business from Apple?  Broadcom ( AVGO ), IBD Leaderboard stock  Macom Technology Solutions ( MTSI ), Cirrus Logic ( CRUS ), Mellanox ( MLNX ) and Nvidia ( NVDA ) make the list. All are at least somewhat diversified, with revenue streams in everything from data center and mobile networking systems to powerful graphics chips for virtual reality and gaming, to connected car technology and now even artificial intelligence. Chips And Profit IBD 50 stock Broadcom was up more than 3% in midday trading in the stock market today , putting it just above and out of buy range from a double-bottom base. Macom was up nearly 6%, similarly above its ideal buy range. Broadcom and Macom Technology Solutions made IBD’s Stocks on The Move screen Friday, heading up in high volume. Broadcom made Thursday morning’s screen too. Early Thursday, Broadcom’s management team had presented at a Susquehanna Financial analysts’ conference. “It’s a great time to operate in the semiconductor industry,” CEO Hock Tan said there. “You have a substantial profit pool … compared to similar industries of the same size.” Loading the player…   Broadcom had started giving up some of its gains as stock indexes dipped into the red with falling oil prices, but it ended up with a 1.7% rise Thursday. Several other top-rated chip stocks moved up early Friday after declining Thursday. Cirrus Logic was up about 3% at midday. Mellanox was up 2% and Nvidia was up fractionally. On Thursday, Mellanox had slipped to the bottom of buy range, as had Macom Technology Solutions, while Nvidia had edged down to about 4% under a buy point from a cup base. While the stock market’s in a confirmed uptrend, much of the action is choppy with ups and downs in oil prices and economic concerns around the globe. Going into Friday trading, all five of these top-ranked chipmakers had fallen from a week ago, between 1% and 7%, with the S&P 500 index down 1%. Cirrus Logic and Mellanox were up 14% and 15% this year, respectively — the only ones of the five with notable gains. Nvidia, an IBD 50 stock, has the strongest IBD Composite Rating of the bunch, a best-possible 99, taking into account earnings growth, stock price gains and several other metrics. The others range between 90 and 98 in Composite Rating. Apple Chips It will take awhile for teardowns to show whose chips go into whatever new products Apple introduces, and longer for those chips to translate into reported sales, and lagging iPhone sales growth lately hasn’t helped the chips. Apple Sets March 21 To Launch Small iPhone, New iPad, Watch Bands https://t.co/MxIpxMFKvc pic.twitter.com/iPxQ1lTAFF — Investors.com (@IBDinvestors) March 10, 2016 Other markets are driving growth, however. Nvidia, for instance, said in its fourth quarter report, in February, that it’s at the “center of four exciting growth opportunities — PC gaming, VR (virtual reality), deep learning and self-driving cars.” Nvidia is a partner to electric car maker  Tesla Motors ( TSLA ) and other auto manufacturers, and said last month that it’s in an alliance with Facebook ( FB ) and Chinese Internet company Alibaba Group ( BABA ) for speedy artificial intelligence chips.

5 Chip Stocks To Watch, With Apple’s Big Event March 21

A basket of top-rated chip stocks are making moves around buy points now. And Apple ( AAPL ), a big user of semiconductors, just sent out press invitations for a March 21 event where it’s expected to introduce a small iPhone and another iPad. So which chip stocks are highly rated by IBD and get at least some of their business from Apple?  Broadcom ( AVGO ), IBD Leaderboard stock  Macom Technology ( MTSI ), Cirrus Logic ( CRUS ), Mellanox ( MLNX ) and Nvidia ( NVDA ) make the list. All are at least somewhat diversified, with revenue streams in everything from data center and mobile networking systems to powerful graphics chips for virtual reality and gaming, to connected car technology and now even artificial intelligence. Chips And Profit Going into Friday trading, IBD 50 stock Broadcom was a few percentage points into buy range from a double bottom base. Broadcom made IBD’s Stocks On The Move screen early Thursday, heading up in high volume alongside Google owner Alphabet ( GOOGL ) and a few other stocks. Early Thursday, Broadcom’s management team had presented at a Susquehanna Financial analysts’ conference. “It’s a great time to operate in the semiconductor industry,” CEO Hock Tan said there. “You have a substantial profit pool … compared to similar industries of the same size.” Loading the player…   Broadcom started giving up some of its gains as stock indexes dipped into the red with falling oil prices, but it ended up with a 1.7% rise for the day. Several other top-rated chip stocks declined Thursday. Mellanox slipped to the bottom of buy range. So did Macom Technology. Nvidia edged down to about 4% under a buy point from a cup base. While the stock market’s in a confirmed uptrend, much of the action is choppy with ups and downs in oil prices and economic concerns around the globe. All five of these top-ranked chipmakers have fallen from a week ago, between 1% and 7%, with the S&P 500 index down 1%. Cirrus Logic and Mellanox were up 14% and 15% this year, respectively, going into Friday. Macom was up 1% while Avago was down 1% and Nvidia down 4%. Nvidia, an IBD 50 stock, has the strongest IBD Composite Rating of the bunch, a best-possible 99, taking into account earnings growth, stock price gains and several other metrics. The others range between 90 and 98 in Composite Rating. Apple Chips It will take awhile for teardowns to show whose chips go into whatever new products Apple introduces, and longer for those chips to translate into reported sales, and lagging iPhone sales growth lately hasn’t helped the chips. Apple Sets March 21 To Launch Small iPhone, New iPad, Watch Bands https://t.co/MxIpxMFKvc pic.twitter.com/iPxQ1lTAFF — Investors.com (@IBDinvestors) March 10, 2016 Other markets are driving growth, however. Nvidia, for instance, said in its fourth quarter report, in February, that it’s at the “center of four exciting growth opportunities — PC gaming, VR (virtual reality), deep learning and self-driving cars.” Nvidia is a partner to electric car maker  Tesla Motors ( TSLA ) and other auto manufacturers, and said last month that it’s in an alliance with Facebook ( FB ) and Chinese Internet company Alibaba Group ( BABA ) for speedy artificial intelligence chips.

If Arista Networks ‘Superbly Positioned,’ What Drove Down Stock?

Needham issued a glowing report on Arista Networks ( ANET ) Thursday, but it fell 4.1% to 61.11 in the stock market . And Arista’s No. 1 switching rival  Cisco Systems ( CSCO ) closed down 0.8% to 27.38. On a trading day when indexes started out on an up note, declined and ended mixed, a fractional slip for Cisco after its 2.1% gain Wednesday can be taken in stride. However, both stocks saw rather wide trading ranges Thursday — especially Arista — coming off its 3% gain Wednesday. There “could be confusion on SONiC,” Needham analyst Alex Henderson told IBD. SONiC stands for “software for open networking in the cloud,” free software-defined networking (SDN) that makes Cisco’s high-speed switches less needed. Microsoft ( MSFT ) announced this contribution to the Open Compute Project at the OCP U.S. Summit in San Jose, Calif., on Wednesday. “SONiC will enable cloud operators to take advantage of hardware innovation while giving them a framework to build upon an open source code for apps on the network switch and the ability to integrate with multiple platforms,” posted Kamala Subramaniam, principal architect of Azure Networking, on a Microsoft blog Wednesday. “SONiC is not just prototyped software but deployed today and planned to run at scale in the future.” Arista is part of Microsoft’s team that created SONiC, along with Broadcom ( AVGO ), Dell and Mellanox Technologies ( MLNX ). Broadcom stock closed up 1.7% to 144.42. But Microsoft stock fell 1.5% to 52.05 Thursday and Mellanox slipped 0.6% to 48.42. As for Arista, SONiCally confusing or not, the company is “superbly positioned” to grow, Henderson wrote in a research note issued Thursday. “We like to think we are pretty technology savvy, but we always feel humbled when we go into Arista and delve into the technology landscape in detail,” Henderson said. “We hit a number of key issues including the 10G to 25G transition, the quality of the Broadcom Tomahawk, the opportunities in storage, the potential of the Jericho chip in the Edge router market, and the advantages Arista has in the SDN market. “This last point is particularly punctuated by the Microsoft contribution of . . . SONiC to the Open Compute Foundation. We come away convinced that ANET has multiple avenues of growth, and we expect continuing share gains.” He reiterated Needham’s buy rating and 105 price target. Henderson noted that “Cisco has been questioning the quality of the Tomahawk chip” but Arista, which made the Tomahawk chip set available in its switches in September, “argues the bugs in this first pass are minor and easily worked around in software” and has “good traction in the market already.” He said Arista “seems to be seeing accelerating conversion of storage area networks (SAN) to storage over IP as “major customers drive to a single unified architecture over IP.” He also observed a “solid ramp,” starting in the second half of this year, for Arista’s 25G/50G/100G speed transition and learned that “Arista thinks some portion of that (Edge router) market can be addressed with much lower-cost switches.” Arista’s “Linux-based, open, programmable and merchant silicon-based products are winning, and the trends continue to increase its advantage,” Henderson said. “We expect ANET to continue to outperform Cisco.” He probably means Arista should outperform Cisco’s growth rate. In the fourth-quarter, Arista grew adjusted earnings per share by 51% to 80 cents, on revenue up 42% to $245 million. In Cisco’s last quarter, ended in January, it grew adjusted EPS by 8% to 57 cents on flat revenue of $11.9 billion. In the current quarter, analysts polled by Thomson Reuters expect adjusted earnings to grow 22% for Arista and 2% for Cisco. Image provided by Shutterstock .