Chips Fall Where They May, the Stocks Are Still Up

SAN FRANCISCO -- What's a chip investor to make of the latest barrage of bad news only working to extend the rally in semiconductors for a third straight session?

To call the recent string of announcements "bad" is an understatement:

Texas Instruments(TXN Quote) tore down its estimates for fourth-quarter results late Monday, offering a revenue midpoint that was 30% below third-quarter results.

Similarly, National Semiconductor(NSM Quote) said its fiscal third-quarter revenue would fall 30% sequentially, well below the Street's consensus analyst estimate.

Altera(ALTR Quote) reported Monday that its fourth-quarter sales would only fall 9% to 12% from the third quarter, but that was down from a previous projected range of down 3% to up 1%.

For the sake of space, let's gloss over similar warnings in the past 16 hours from Broadcom(BRCM Quote), Integrated Device Technologies(IDTI Quote), Novellus(NVLS Quote) and Samsung Electronics.

No matter. Chip stocks, along with the broader tech index, were climbing in early Tuesday trading. Shares of TI were up nearly 6%, Broadcom was up 10% and Nat Semi rose more than 13%.

The Semiconductor HOLDRs(SMH Quote) exchange-traded fund was up 5%, near levels not seen in nearly a month.

It's not like Wall Street has been trying to spin the recent chip news in a particularly glossy light, either. Investment management firm Baird said Tuesday there was "no quick fix" for TI, and suggested the company will continue to feel pain from the global economic slowdown and its own market share losses in wireless chips.

On Monday, Stifel Nicolaus cut its price target on chip bellwether Intel(INTC Quote) and floated the possibility that the company would need to ratchet down its revenue estimate for a second time this quarter.