NEW YORK (AP) -- The chip sector is looking stronger after an inventory correction, especially with fears of a near-term economic downturn fading, analysts at J.P. Morgan Securities said Monday.
Demand from several end markets is improving, according to the analysts led by Christopher Danely. The situation with large inventories in the consumer and PC markets is in its second quarter, and inventory corrections generally only last two or three quarters, according to the research report.
The analysts upgraded their view on the entire sector from "cautious" to "constructive." They upgraded three stocks from "neutral" to "overweight:" Texas Instruments Inc., Xilinx Inc. and ON Semiconductor Corp.
Texas Instruments is a top pick for J.P. Morgan, which said the company is likely to top Wall Street estimates as customers replenish their inventories in the second half of the year.
They upgraded Xilinx for similar reasons, noting it's been hit hard by the inventory correction.
The analysts noted that they're still cautious on the PC market, but said demand from the automotive market should help offset PC market weakness for ON Semiconductor.
The stocks had not opened for trading Monday morning.
Demand from several end markets is improving, according to the analysts led by Christopher Danely. The situation with large inventories in the consumer and PC markets is in its second quarter, and inventory corrections generally only last two or three quarters, according to the research report.
The analysts upgraded their view on the entire sector from "cautious" to "constructive." They upgraded three stocks from "neutral" to "overweight:" Texas Instruments Inc., Xilinx Inc. and ON Semiconductor Corp.
Texas Instruments is a top pick for J.P. Morgan, which said the company is likely to top Wall Street estimates as customers replenish their inventories in the second half of the year.
They upgraded Xilinx for similar reasons, noting it's been hit hard by the inventory correction.
The analysts noted that they're still cautious on the PC market, but said demand from the automotive market should help offset PC market weakness for ON Semiconductor.
The stocks had not opened for trading Monday morning.