Morgan Stanley analyst Atif Malik this morning issued a short-term tactical buy recommendation on semiconductor test equipment provider Verigy (VRGY).
“Based on our earnings confession framework, we believe back-end semicap companies will be first in the cycle to see bookings decline/estimate cuts and thus will be early outperformers off the bottom,” he writes in a short research note. He notes that the stock has recently underperformed the group, but should close the gap.
Malik also says that “checks” find positive market share momentum, with wins at both Marvell and Broadcom, and potential follow-on capacity orders from Qualcomm as it ramps production to supply chips to Apple.
VRGY is up 50 cents, or 5.9%, to $9.04.
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