Several highflying chip stocks have room to climb higher, Wall Street analysts predicted Tuesday.
Susquehanna Financial Group initiated coverage of 12 chip stocks, giving positive ratings to seven, including IBD 50 stock Broadcom (AVGO).
"We are compelled by the company's FBAR (film bulk acoustic resonator) franchise and the acquisition of Broadcom 'Classic,' whose near-monopolistic positions in merchant networking silicon and set-top boxes should help drive increasing profitability," Susquehanna analyst Christopher Rolland said in a research report.
He has a price target of 200 on Broadcom stock, which fell 1.5%, to 168.23, on the stock market today.
IBD'S TAKE: Broadcom is one of eight semiconductor firms on the IBD 50 list of superior stocks. Others include Nvidia and Inphi.
Other chip companies Rolland rated as positive included Intel (INTC) and Microsemi (MSCC).
Separately, Canaccord Genuity raised its price target on audio chipmaker Cirrus Logic (CRUS) to 65 from 56 and maintained its buy rating.
Cirrus stock rose a fraction Tuesday, to 55.80, hitting a 21-year high for the fourth consecutive trading day.
Cirrus Logic increased its chip content in Apple's (AAPL) iPhone 7 by 70% compared with last year's iPhone 6S, Canaccord analyst Matthew Ramsay said in a report. Cirrus will get about $6 per phone with the iPhone 7, up from about $3.50 previously, he said.
"While some investors have voiced concerns this significant content increase at Cirrus' largest customer could mark peak earnings growth for the company, we disagree and believe our positive thesis is very much intact given we believe Cirrus' leading portfolio of audio codec, amplifier and MEMS microphone products -- the complete audio value chain -- is well positioned to yield strong sales and earnings growth for the company for the next several years, even despite the well-documented slowing of global smartphone and iPhone unit growth expectations," Ramsay said.
Ramsay also raised his price target on Intel to 44 from 40 and maintained his buy rating. He is encouraged by stabilizing PC sales and growth in the data center market.
Intel stock fell 2 cents to 37.14 on Tuesday. Shares are in buy range from a 36.03 buy point. IBD's chip sector is No. 2 out of 33, up more than 17% so far this year.
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