Cypress Semiconductor jumps on outlook, upgrade

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Shares of Cypress Semiconductor Corp. (NYSE: CY) moved up 1, or 8 percent, to 12 7/8 Wednesday after Prudential Securities upgraded the stock from an "accumulate" rating to "strong buy" and boosted its 12-month price target from $14 a share to $18 a share.

The upgrade comes on the heels of a very positive report from the Semiconductor Industry Association.

On Tuesday, the SIA said worldwide chip sales growth is expected to jump more than 12 percent in 1999, the largest improvement since 1995.

In the trade association's report, analysts cited increased use of the Internet and the "exponential increase in e-commerce throughout the world" for the improving demand.

"The global semiconductor market will show recovery in 1999 and double digit growth through 2002," the association said in the report.

The overall growth of the semiconductor industry is expected to exceed the 1999 sales of $140.8 billion, increasing 12.1 percent and expanding to $162.5 billion, increasing 15.4 percent, in the year 2000. SIA is predicting bigger gains in 2001 with sales of $191.0 billion increasing,17.6 percent, and ending the year 2002 with $215.7 billion of global sales increasing 12.9 percent.

Among other widely held chip stocks, Intel Corp. (Nasdaq: INTC) was up 1 5/16 to 53; Advanced Micro Devices Inc. (NYSE: AMD) was off 1/16 to 17 5/8 and National Semiconductor Corp. (NYSE: NSM) added 5/16 to 19 5/16.

First Call consensus expects Cypress to earn 12 cents a share in its second quarter and 58 cents a share in the fiscal year.

Nine of the 12 analysts following the stock rate it either a "buy" or "strong buy."

Back in August, the stock was trading at a 52-week low of 5 1/2. It rallied to a high of 12 15/16 in May.