Semiconductors were quite a spectacle in May.
Take Broadcom Corp. Shares of the Irvine maker of communications chips rose 18% last month.
Another chipmaker, Newport Beach-based Conexant Systems Inc., climbed 40% in May.
Woburn, Mass.-based Skyworks Solutions Inc.,created in 2002 with the combination of Conexant’s wireless chip business and Alpha Industries Inc. of Massachusetts,climbed 24% last month.
The Philadelphia Semiconductor Index, a benchmark for chip stocks, climbed 11% in May.
Could this be the start of a bigger tech rally?
Maybe, at least according to a recent piece at TheStreet.com, which credits the climb in chip stocks to stock portfolio managers loading up on shares.
“You just don’t see stocks go up in a straight line like that,” Scott Curtis, director of trading at Kinetics, a New York-based money management firm, told TheStreet.
Portfolio managers stocking up on semis is a sign the tech sector is on the upswing, according to TheStreet. Other factors at play, according to TheStreet: lower energy prices and overall economic strength.
The chip sector’s vigor can be been seen at Broadcom.
The company recently upped its outlook for the second quarter, saying it expects sales to grow 4% to 5% from a year earlier to about $575 million. Sales of chips for data storage, wireless networking, voice over Internet and videogame consoles are likely to pick up in the second half of the year, according to a recent report on Broadcom from Goldman Sachs Group Inc.
Credit Suisse First Boston recently upgraded shares of Conexant, from “underperform” to “neutral,” which drove the company’s shares up.
The investment bank said it no longer expected the chipmaker’s shares to under perform its peers on Wall Street.
Before May, Conexant shares were off by about a third since November, as the company has been trying to recover from its troubled buy of Red Bank, N.J.-based GlobespanVirata last year.
In April, Conexant told investors that it had burned through some of its unsold chips in the past quarter.
The first phase of its comeback was done, Conexant said.
The chipmaker still reported lower sales, with a 30% decline to $170 million for the quarter ended March 31. Conexant’s operating loss for the period narrowed by more than half, to $61 million.
The second phase of Conexant’s rebound plan includes growing sales, completing cost reductions and becoming profitable by the end of the year.
Ingram’s Outlook
Greg Spierkel’s first act as chief executive of Santa Ana-based Ingram Micro Inc.: reassure investors that its second-quarter outlook is unchanged.
Spierkel, who took over as chief executive from Kent Foster on June 1, said the company expects to report sales of $6.7 billion to $6.9 billion for the second quarter. Profit is seen at $41 million to $46 million. The forecast is unchanged from an earlier one in April.
“We’re pleased to confirm our guidance despite reports of economic softness in certain European markets and continuing competition in North America,” Spierkel said.
The guidance was the first interaction between Wall Street and Spierkel in his chief executive role.
Spierkel previously ran Ingram’s operations in Europe and Asia, both of which have been solid performers in the past year.
Foster, who retired as chief executive, is set to remain chairman of Ingram, a distributor of technology gear.
Quest Buying Again
Irvine-based Quest Software Inc. is starting to take a page from acquisition happy Broadcom.
Last month, the company said it plans to buy Vintela Inc. of Lindon, Utah, for $56.5 million.
The buy is Quest’s second this year. Quest wrapped up its buy of privately held Imceda Software Inc. for $61 million last week.
Vintela makes software that helps products made by Microsoft Corp. work with the free, open source Linux operating system.
Quest makes software that makes it easier to use databases from Microsoft, Oracle Corp. and other companies.
Acquisitions like Vintela allow Quest’s software to work more easily with
databases from a variety of software makers.
Gateway Honored
Ted Waitt, Irvine-based Gateway Inc.’s founder, probably never thought his company would be honored by a retailer as “vendor of the year.”
After all, Gateway once exclusively sold computers directly to consumers without the help of middlemen. It later opened its own chain of stores, which since have closed.
But then again, he probably never thought a Best Buy alum,Wayne Inouye,would be running his company.
Best Buy Co. honored Gateway last month as vendor of the year for laptop and desktop computers. The irony is a little funny.
