CapEx to Drive Growth in Semis - Analyst

Wireless infrastructure spending is poised to pick up significantly during the second half of 2012, according to George Notter, an analyst at Jefferies. Other sources, including Infonetics, expect telecom CapEx to rise in 2012, as operators around the world ramp their spending to launch LTE networks, modernize mobile networks, and carryout national wireline broadband initiatives.

Sundeep Bajika, equity analyst at Jefferies, thinks the increase in CapEx will benefit semiconductor stocks. In a research note today, he highlighted the following companies as potential beneficiaries: Cavium, Inc. (Nasdaq: CAVM), Lattice Semiconductor Corporation (Nasdaq: LSCC), Altera Corp. (Nasdaq: ALTR), PMC-Sierra Inc (Nasdaq: PMCS). The companies mentioned are all Buy rated.

Merrill Lynch Semiconductors HOLDRS ETF (NYSE: SMH) tacked on 5 percent in the past 5 trading sessions, signaling a sentiment shift for stocks in the sector.

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