The worst is over for PC, smartphone chip stocks, says analyst

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A Wall Street analyst Thursday called a cyclical bottom for chip makers involved with personal computers and smartphones. they upgraded intel ,INTCwith stock Qualcomm ,qcom) And Skyworks Solutions ,swks,


Susquehanna Financial Group analyst Christopher Roland raised his rating on Intel stock from negative to neutral. Also, he upgraded Qualcomm and Skyworks from neutral to positive.

“We believe the rapid part of the semiconductor downcycle has passed for the handset, PC and consumer markets,” Roland said in a note to clients. He added that the industrial and automotive chip markets have not yet recovered.

Roland predicted that inventory levels would soon normalize and demand would pick up in segments that cover the PC and handset markets.

“That said, we’ll forward to Part II of this upgrade, which will include industrial, auto and broad-based stocks, a later date,” he said.

Intel stock, other chip stocks rise

Intel’s stock jumped 5% to 29.84 in afternoon trading on the stock market today. Qualcomm stock rose 3.6% to 119.65. Skyworks stock rose 2.2% to 114.20.

Elsewhere in semiconductor stocks, Advanced Micro Devices ,amd) extended its breakout on Thursday. The PC and server chipmaker saw its shares rise 2.6% on Wednesday. AMD stock broke out of a flat base with a buy point of 89.04, according to IBD MarketSmith charts.

In midday trading on Thursday, AMD stock rose 6.5% to 95.46. AMD has outperformed rival Intel stock thanks to recent market share gains.

The Semiconductor Index, better known as the SOX, climbed 2.5% on Thursday. Year-to-date, it’s up 20.5%. This is compared to a 2.6% increase for the S&P 500 Index. SOX includes the 30 largest semiconductor stocks traded in the US

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Follow Patrick Seitz on Twitter @IBD_PSeitz For more stories on consumer technology, software and semiconductor stocks.

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