SAN FRANCISCO Craig Berger, an analyst for Wedbush Morgan Securities, upgraded his firm's rating on Broadcom Corp.'s stock to "strong buy" Tuesday (March 13), citing multiple factors including suspicion that Broadcom has secured more design wins at Nokia than previously anticipated, which could boost second half 2007 revenue.
"We believe Broadcom has won a number of significant Bluetooth design wins into Nokia's handsets and headsets, possibly contributing more in 2H:07 than many investors anticipate," Berger wrote.
Berger said Wedbush expects chip stocks to appreciate in 2007 and that Broadcom (Irvine, Calif.) is likely to outperform peers given its diverse product line and technology leadership. Wedbush further anticipates that Broadcom's investment in 65-nanomer products will pay off and that products launched by the company at the recent 3GSM World Congress increase the likelihood of a 2008 cellular product cycle with Nokia and/or Samsung, Berger wrote.
Berger, who previously had rated maintained a "buy" rating on Broadcom, also increased Wedbush's target price on the stock to $44 from $42. Broadcom closed at $33.43 in Nasdaq trading Tuesday.
Also Tuesday, Alex Gauna, an analyst at UBS Securities LLC, wrote in a research note that UBS believes that Broadcom has entered into the hard-disk drive system-on-chip (SoC) market to compete with Marvell and Agere Systems Inc.