Boston, MA, 02/27/2014 (usastockreport) – ProShares Ultra Semiconductors (ETF) (NYSEARCA:USD) trades in green as the broader chip segment is upbeat following Avago’s positive first-quarter numbers and STMicroelectronics European sales remarks.
Trending In The Chip Stocks
Avago Technologies Limited (NASDAQ:AVGO), which occupies nearly 2.50% share in ProShares Ultra Semiconductors (ETF) (NYSEARCA:USD) portfolio, presented an upbeat first quarter results, though it did come out softer in current quarter projections. The shares of the company have been on an upswing following a 23% year-over-year increase in revenue to $709 million and earnings per share of 84 cents, beating the consensus of 79 cents and reported a growth of 29% year-over-year. For the current quarter, the company projected revenue in the range of $667-$688 million, which falls short of the market estimate of $697 million. Avago has been able to keep up its revenue for the third quarter in a row due to a significant growth in wireless and wired infrastructure group.
Following this, the analyst at RBC has also upgraded the price target of the stock from $64 to $66 per share, citing its lead play in China and for LTE deployments globally. The research firm opines that the chipmaker’s LSI acquisition completion can help it to top the earnings per share of $5 in the financial year 2015. Analyst at Morgan Stanley too expressed the same views stating that Avago has the ability to drive the operations margin of LSI from 17% to 30%, like the way they did their own, while it maintains a price target of $68 for the stock.
Broader Market Surge
Another semiconductor firm STMicroelectronics NV (NYSE:STM) reported recovering sales in the Europe region. The company’s executive Paul Grimme stated that the company’s sales in Europe is gaining stability, and Germany is leading the way. These remarks have not only reflected positively on STM, but on the broader chip stocks as well, including, Skyworks Solutions Inc. (NASDAQ:SWKS), RF Micro Devices Inc. (NASDAQ:RFMD), which forms a part of ProShares Ultra Semiconductors (ETF) (NYSEARCA:USD) portfolio.