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Chips: Inventory Restocking–Or A Real Bottom?

in News on March 17, 2009 at 4:37 pm PT

Chip stocks are suddenly on a ferocious tear: the SMH, the semiconductor HOLDRs, have rallied 16 percent in six days. There’s a spreading view that semiconductor demand may have hit bottom. But not everyone is convinced. Auriga USA analyst Daniel Berenbaum this morning asserted in a research note that “the recent rush to call the bottom in semiconductor stocks is based largely on supply-side data that effectively ignores continued deterioration in demand.” Berenbaum thinks the SOX, the widely tracked semiconductor stock index, will eventually return to its November lows in the 170 range.