Vitesse Semiconductor shares rallied up 12 3/16 to a 52-week high of 103 13/16 after its CEO predicted operating income and gross profit margins will settle in at 40 percent and 70 percent, respectively, in the next five to eight quarters.
Vitesse (Nasdaq: VTSS) CEO Lou Tomasetta made those bold predictions to analysts during the Robertson Stephens Tech 2000 investment conference in San Francisco Tuesday.
Tomasetta said the company has been adding 10 to 20 new products every quarter and he expects that trend to continue in the rest of 2000.
Vitesse supplies chips for some of the fastest-growing communications markets, including optical fiber and fiber channel segments using
Earlier Tuesday, Salomon Smith Barney raised its 12-month price target from $40 a share to $100 a share.
Last quarter, Vitesse met analysts' estimates, earning $23.6 million, or 14 cents a share, on sales of $89.2 million.
Vitesse wasn't the only chip stock making big gains Tuesday. Rambus Inc. (Nasdaq: RMBS) shot up 60 5/8 to 301 5/8 and Altera Corp. (Nasdaq: ALTR) marched up 8 1/4 to 79 3/4.
First Call consensus expects the Camarillo, Calif. company to earn 15 cents a share in its second quarter and 66 cents a share in the fiscal year.
Its shares fell to a low of 20 3/8 in April.
All 20 analysts tracking the stock maintain either a "buy" or "strong buy" recommendation.