If there is any place in the world where past calls are rewarded if they are good, it’s Wall Street, and with good reason. The top firms that we cover here at 24/7 Wall St. are constantly tasked with making individual stock and sector calls. The kudos goes to the calls that are made in front of stocks or sector moves, not after the fact when the outcome is already known, like the new downgrades of Wal-Mart.

In a new report, JPMorgan takes a very well-deserved victory lap as the firm came out in early September and not only said buy the chip sector, but it upgraded two stocks that have made significant moves. We screened the firm’s chip coverage universe and found four Overweight rated companies that look solid.

Microchip Technology

This company is a huge Internet of Things benefactor. Microchip Technology Inc. (NASDAQ: MCHP) is a leading provider of microcontroller, mixed-signal, analog and flash-IP solutions, providing low-risk product development, lower total system cost and faster time to market for thousands of diverse customer applications worldwide. The company offers 8-bit, 16-bit and 32-bit microcontrollers under the PIC brand name, and 16-bit dsPIC digital signal controllers, as well as provides microcontrollers for automotive networking, computing, lighting, power supplies, wireless communication and wireless audio applications.

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The company announced recently that its MOST 50 Intelligent Network Interface Controllers (INICs) are powering the infotainment systems of the new Toyota Alphard executive-lounge hybrid vehicles. This is the latest deployment among a wide variety of the Toyota’s brands, which have used MOST50 in their infotainment systems for many years, including both volume and luxury vehicles. In the new Alphard implementation, Toyota is using MOST technology to ensure high-quality digital audio streaming throughout the vehicle.

MicroChip investors are paid a very solid 3% dividend. The JPMorgan price target for the stock is $54, and the Thomson/First Call consensus price objective is $49.20. The stock closed most recently at $47.31 up over 3%.
Cavium

This stock has been a Wall Street favorite for some time, and it could be a great addition to portfolios. Cavium Inc. (NASDAQ: CAVM) generates a sizable part of its revenue from the association it has with Cisco Systems with security and multicore embedded processors. Analysts around the street see the company well positioned with multicore processor portfolio and design wins in enterprise and service provider markets.

Research indicates that Cavium sees its core business outside of wireless growing nicely for the remainder of the year and next year as well. The company’s Data Center business is being driven by demand for LiquidIO 1 cards at its largest cloud data center customer, and other customers may be on-board soon. A recent Wall Street research report indicates that a staggering 43.1% of small-cap funds own this top technology company.

The JPMorgan price target is $73, and the consensus target is $69.60. Shares closed Wednesday at $67.43.

Micron Technology

This top technology stock has been absolutely mauled this year. Micron Technology Inc. (NASDAQ: MU) trades at a 3.38 price-to-cash-flow figure. Since January the stock is down a massive 50%, and over 30% since the end of June. The JPMorgan team thinks the company may be one of those in talks to buy SanDisk, and they think that Micron could significantly benefit from SanDisk’s technology and portfolio leadership in the NAND flash semiconductor and enterprise flash systems market.

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Micron Technology is a global leader in advanced semiconductor systems. Micron’s broad portfolio of high-performance memory technologies, including DRAM, NAND and NOR flash, is the basis for solid state drives, modules, multichip packages and other system solutions. The company’s memory chip solutions enable the world’s most innovative computing, consumer, enterprise storage, networking, mobile, embedded and automotive applications.

The $22.50 JPMorgan price target is right in line with the consensus target of $22.20. Shares closed Wednesday at $18.82.

SanDisk

Recent reports indicate that SanDisk Corp. (NASDAQ: SNDK) is putting itself up for sale. We covered what the company may fetch pricewise. SanDisk is a supplier of quality, state-of-the-art solutions that are at the heart of many of the world’s largest data centers and embedded in advanced smartphones, tablets and personal computers.

In the company’s most recent quarterly report, SanDisk reported earnings and revenue that beat the Wall Street estimates. The beat came did however come on the back of lowered expectations. While the road may remain a little rocky for the company, as some believe it lost business from Apple for the iPhone 6s, many are positive on the company’s deep product portfolio breadth, and needless to say the buyout chatter is launching the stock.

SanDisk investors are paid a 1.75% dividend. The $70 JPMorgan price target may get blown away with a big premium offer. The current consensus target is at $64.55. The shares closed up huge Wednesday to $68.70, tacking on over an 11% gain.

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The bottom line for investors is JPMorgan made the call to own the chips and it is staying with the call. The firm thinks that 2016 looks better for chips and chip equipment, and given the rough 2015, it is a good-looking sector valuewise.

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