More Evidence Of Semiconductor Recovery (LLTC, INTC, TXN, XLNX, ALTR, MXIM)

Semiconductor investors have had to endure a lot of pain and a lot of volatility, but things may be on the mend.  Analog chip players were higher throughout the trading day after Linear Technology Corporation (NASDAQ: LLTC) gave guidance that offered far more hope than what investors had been expecting just a few weeks ago when Intel Corporation (NASDAQ: INTC) warned about a large revenue shortfall.  Linear shares rose 11.5% to $33.32 on Wednesday. Texas Instruments Inc. (NYSE: TXN) rose 8.5% to $33.72 on the news and guidance from Linear Tech today. 

Now we have further news coming from Xilinx, Inc. (NASDAQ: XLNX) that is adding to gains.  After shares were already up almost 6% at $35.30 on Wednesday, the stock is up almost 7% in the after-hours session at $37.85 and that will mark a new 52-week high if it holds up.   The company noted that while revenues fell 10% to $511.1 million on earnings of $0.47, the consensus target was only $498.3 million and $0.37 EPS.  Xilinx is offering guidance of 2% to 6% revenue growth.

There are some other secondary plays out there on this.  When investors trade up in Xilinx, they often trade up Altera Corporation (NASDAQ: ALTR).  When investors trade up in Linear Tech, they often trade up in Maxim Integrated Products, Inc. (NASDAQ: MXIM) as well.  All are higher in the after-hours session and Altera was up almost 10% at $40.72 and Maxim rose by 6.1% today to $27.56.

Get ready for Intel to report earnings on Thursday after the close (estimates are $0.61 EPS on $13.72 billion in sales).  If it reverses or lightens up on the severity of its revenue guidance offered in December, then going from $25.39 to above $25.92 would not hard to fathom.  Anything above that would mark a 52-week high and analysts have a consensus price target objective of $26.58.

It is important to keep in mind that in many cases these “higher guidance” calls are barely higher and it is off of declining sales.  Still, in the end investors want improvements and growth and sometimes mediocrity wins the day.  If these all hit new 52-week highs, the cheer will be simple enough: “Chips Ahoy!”

JON C. OGG