SAN FRANCISCO -- Semiconductors have been on the rise in advance of next week's
Morgan Stanley Dean Witter
Philadelphia Stock Exchange Semiconductor Index
has gained more than 4.5% in today's session.
Ahead of next week's event, Morgan Stanley analyst Mark Edelstone upped his ratings on two stocks,
, while also giving a plug for the entire industry.
"With the exception of seasonally weak PC demand, we believe that end demand is solid in most of the end market," Edelstone wrote in a research note released earlier today. "We believe that the communications sector will support the best sequential growth opportunities for the overall semiconductor industry (and the PLD sector in particular) during the first quarter."
Altera, which Edelstone upgraded to strong buy from outperform, was recently up 3 1/4, or 6%, to 57 3/16. Edelstone said Altera is "undervalued and attractively priced," but he kept his 80 price target on the stock.
Edelstone also upgraded Microchip to strong buy from outperform, noting that the stock was "significantly undervalued" after declining 33% from its 52-week high reached Jan. 11. Microchip gained 3, or 10.6%, to 31 7/16.
Karey Barker, portfolio manager with
, continues to hold Microchip in the company's $40 million
Mid Cap Fund. She said Microchip is a little different than other chip companies in that its end market is much broader, with a large exposure to consumer electronics and automotive products.
"They've followed the cycle
of the semiconductor sector, but the way you've made money in Microchip is they've gained a lot of market share in the markets they've entered."
Barker said she's been hearing "mixed signals" about the company this quarter, with the larger brokerage houses mostly upbeat.
has been benefiting from the split mania that gripped Net stocks. CNet was lately up 12 3/4, or 9%, to 152 7/16 ahead of its 2-for-1 split that will go into effect after the close of trading Monday.
Like split mania, IPO mania continued today as well. Software company
was recently trading 10 1/4 higher, more than 65% above the 15 level that it was priced at on Thursday.