Shares of Kulicke & Soffa Industries Inc. rose 1.6% in premarket trading Tuesday, after the Singapore-based chip device maker provided upbeat revenue guidance for its fiscal fourth quarter. The company said it now expects revenue of $177 million, compared with previous guidance of $165 million plus-or-minus $10 million, and above the FactSet consensus of $166 million. "We are pleased with our fiscal fourth quarter performance and current demand stemming from 5G and advanced display, which benefits our core and our new growth businesses," said Chief Executive Fusen Chen. "Broad market conditions remain dynamic and we remain cautiously optimistic as we look ahead into fiscal year 2021." The stock has lost 7.4% year to date through Monday, while the PHLX Semiconductor Index has soared 31.6% and the S&P 500 has gained 9.4%.
Shares of Micron Technology Inc. rallied 2.5% in premarket trading Tuesday, after Deutsche Bank analyst Sidney Ho upgraded the memory chip maker, citing signs suggesting DRAM demand has picked up in both mobile and server markets. Ho raised his rating to buy from hold, and boosted his stock price target by 20%, to $60 from $50. "While we acknowledge that there are risks that the recent demand strength is driven by inventory accumulation, we nonetheless believe it will help lessen the seasonal soft demand in the first half of CY21," Ho wrote in a note to clients. "In addition, with DRAM suppliers showing willingness to cut back on capital spending, there is a belief among key smartphone and server OEMs that supply could tighten again in the second half of CY21, which should lead to price stabilization earlier that we previously expected." Ho said he believes the risk-versus-reward outlook is now skewed more positive, as the risk of significant estimate cuts has been substantially reduced. The stock has slipped 5.8% year to date through Monday, while the PHLX Semiconductor Index has run up 31.6% and the S&P 500 has gained 9.4%.
Shares of Advanced Micro Devices Inc. sank 5.2% in premarket trading Friday, while Xilinx Inc. soared 17%, after The Wall Street Journal reported that the AMD was in advanced talks to buy rival chip maker Xilinx in a deal valued at more than $30 billion. Xilinx stock was on track to open at the highest level seen during regular-session hours since July 2019. At Thursday's close, the company had a market capitalization of $25.89 billion, while AMD's market cap was $101.57 billion. The WSJ report doesn't indicate whether the deal will be in cash, stock or both. AMD's stock has soared 88.6% year to date through Thursday, while Xilinx shares have gained 8.4%. In comparison, the PHLX Semiconductor Index has rallied 27.4% and the S&P 500 has advanced 6.7%.