Shares of Cypress Semiconductor Corp. (NYSE: CY) shot up another 1 9/16, or 11 percent, to a 52-week high of 15 7/16 Tuesday, helping lead a modest rally in widely held chip stocks.
Last week, Prudential Securities upgraded the stock from an "accumulate" rating to "strong buy" and bumped its 12-month price target to $18 a share from $14 a share.
Most of the excitement for Cypress and other chip companies is based on a rosy report from the Semiconductor Industry Association.
Last week, the SIA said worldwide chip sales will improve 12 percent in 1999, the largest jump since 1995.
The overall growth of the semiconductor industry is expected to exceed the 1998 sales of $140.8 billion, increasing 12.1 percent to $162.5 billion and jumping 15.4 percent in 2000. SIA is predicting bigger gains in 2001 with sales of $191 billion and more than $215 billion in 2002.
Among other chip stocks, Intel Corp. (Nasdaq: INTC) moved up 3/4 to 55 1/8; Advanced Micro Devices Inc. (NYSE: AMD) gained 1 1/4 to 18 3/16; LSI Logic Corp. (Nasdaq: LSI) rose 3/8 to 43 3/4 and National Semiconductor Corp. (NYSE: NSM) was up 3/8 to 21 1/8.
First Call consensus expects Cypress to earn 12 cents a share in its second quarter and 58 cents a share in the fiscal year.
The stock bottomed out at 5 1/2 in August. Eight of the 11 analysts following it maintain either a "buy" or "strong buy" recommendation.