Chip stocks rise with economic reports, industry report of ongoing chip sale improvements

Sector Snap: Chip stocks rise

SAN FRANCISCO — Shares of chip makers rose Wednesday including three of the biggest — Intel Corp., Texas Instruments Inc. and Advanced Micro Devices Inc. — after a Stifel Nicolaus analyst resumed coverage of the companies.

In a note to clients, Stifel Nicolaus’ Patrick Ho gave Intel a “Buy” rating and $30 target price; Texas Instruments got a “Buy” rating and $32 target price; and AMD got a “Hold” rating.

The analyst said that Intel, which is the world’s largest chip maker, may see better margins and earnings leverage after restructuring its business model.

Ho believes the company will do better than competitors both in the near future and over time, helped by its large manufacturing footprint.

Intel shares rose 78 cents, or 3.5 percent, to $23.06.

Of AMD, Ho said the second-largest microprocessor maker is working on a turnaround as it shifts from making chips to outsourcing the task. But he said AMD needs to show some consistency before he’s comfortable with the stock.

AMD shares rose 47 cents, or 5.1 percent, to $9.54.

The analyst’s “Buy” rating for Texas Instruments comes after the company moved away from chips that beam a cell phone call to a tower, focusing instead on its analog and embedded processing chips.

Ho said Texas Instruments “has already started to see the fruits of many key strategic decisions and will see additional benefits in future years.”

Shares of Texas Instruments rose 49 cents to $26.14.