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Real Story: Telecom Insights

TSC Staff

Chip inventories are in a "transition period" but still remain a bit elevated, Bob Faulkner, author TheStreet.com Telecom Connection, told Aaron Task on Monday's Real Story podcast.

"As more [firms] work through inventories, they'll start talking about positive surprises and better orders."

Faulkner says we're at the leading edge of that cycle and believes Qualcomm (QCOM) and Texas Instruments (TXN), the "weapons suppliers," are best positioned to profit when the cycle turns.

Rather than a sign of problems ahead, Monday's warning from Agere Systems (AGR) was probably a function of its customer Seagate (STX) trying to rationalize its inventories as it absorbs Maxtor, which it acquired last year, Faulkner said.

The telecom expert also weighed in on the $6 billion supply contract Verizon Wireless (VZ) signed with Alcatel-Lucent (ALU), saying the companies' "shared DNA" makes it hard for competitors to make inroads.

In the remainder of the podcast, Task addressed the day's other big corporate news, including the stent battle between Boston Scientific (BSX) and Abbot Labs (ABT), as well as the latest dramatic moves for biotech stocks such as Alexza Pharmaceuticals (ALXA) and CV Therapeutics (CVTX).

The "Real Story" host also discussed Monday's macroeconomic news, including the weaker-than-expected new-homes sales data and the latest moves in crude oil prices, calling the market's comeback from related early weakness a bullish sign.

Click here to listen to the entire podcast.