SAN FRANCISCO Citing positive feedback through channel checks and saying the company's touch screen technology may have a far larger market opportunity beyond Apple Inc.'s iPhone, analyst Alex Gauna of UBS Securities LLC Thursday (Jan. 25) upgraded his firm's rating on Broadcom Corp.'s stock to "buy" from "neutral."
In a research note published Thursday, Gauna wrote that channel checks indicate that Broadcom (Irvine, Calif.) avoided most of the "major Bluetooth pitfalls" in the fourth quarter of 2006. Gauna said UBS believes Broadcom is "capturing meaningful share in tier one headset OEMs," and is set to begin ramping with another tier one handset OEM "within the next couple of quarters."
Gauna said Broadcom's touch screen controller chip, found in Apple's recently unveiled iPhone, may have applications in larger screen displays. UBS believes Apple may migrate the technology into other offerings, including iPods, notebooks and Apple's forthcoming television product, over time, Gauna wrote.
Also Thursday, Gauna upgraded UBS' rating on NetLogic Microsystems Inc., saying UBS believes the company will follow through from a first quarter recovery with further gains in the second quarter and the second half of this year, based on IPTV and enterprise upgrade cycles in addition to new product ramps.