Intel Corp. (NASDAQ: INTC) short interest fell 1% to 233.21 million shares. About 4.7% of Intel’s float is now short.

Advanced Micro Devices Inc. (NYSE: AMD) saw short interest fall by 6% to 96.06 million shares, or 15.9% of the company’s total float.

Qualcomm Inc. (NASDAQ: QCOM) short interest rose by 3.4% to 14.29 million shares, which represents 0.8% of the company’s float.

ARM Holdings PLC (NASDAQ: ARMH) saw a 5.9% rise in short interest to 3.46 million shares, which represents about 0.7% of the firm’s float.

Micron Technology Inc. (NASDAQ: MU) showed a decline of 22.4%% in short interest, to 66.32 million shares, or about 6.5% of Micron’s float.

SanDisk Corp. (NASDAQ: SNDK) saw short interest fall by 16.7% to 7.8 million shares, or 3.2% of the company’s float.

Short interest in Broadcom Corp. (NASDAQ: BRCM) rose by 1.5% to 7.46 million shares. That is 1.5% of the total float.

Marvell Technology Group Ltd. (NASDAQ: MRVL) posted a 2.4% increase in short interest, to 5.6 million shares, or about 1.4% of Marvell’s float.

Nvidia Corp. (NASDAQ: NVDA) short interest rose by 1.8% to 26.52 million shares, about 4.5% of the company’s float.

Texas Instruments Inc. (NASDAQ: TXN) saw short interest decline by 5.9% to 26.5 million shares, or 2.4% of the float.

Applied Materials Inc. (NASDAQ: AMAT) short interest rose by 1.8% to 18.95 million shares, which is about 1.6% of the company’s float.

The Market Vectors Semiconductor ETF (NYSEMKT: SMH) showed a drop of 3.8% in short interest to 9.34 million shares.

Shorts in Texas Instruments got squeezed by the company’s better-than-expected quarterly earnings report and the faint-hearted dropped their positions and likely went looking for a better play.

During the prior two-week period, short sellers added more than 15% to their positions in SanDisk. In the most recent report, more than 16% dropped their short in their short position in the stock. Their timing looks good; SanDisk hit a two-month bottom on May 1 and has been on the rise ever since.

The projection for wirelessly connected devices comes from U.K.-based ABI Research and are part of the firm’s Internet of Everything (IoE) research service. The firm’s practice director said:

The emergence of standardized ultra-low power wireless technologies is one of the main enablers of the IoE, with semiconductor vendors and standards bodies at the forefront of the market push, helping to bring the IoE into reality. … Today, Hub devices such as smartphones, tablets, and laptops are pivotal in enabling the IoE ecosystem and will continue to be an essential building block. Future growth, however, is driven by node or sensor type devices and by 2020 these will account for 60% of the total installed base of devices.

Node and sensor devices typically use low-cost, relatively simple chips capable of doing a single task, like opening your garage door or turning on the furnace as you leave work to return to a nice warm home. The Internet of Everything is really cloud-computing pushed down to the level of devices that are not often thought of as computing machinery.

One of the technologies that is likely to thrive in this brave new world is Bluetooth. Chipmakers like Broadcom Corp. (NASDAQ: BRCM) and Texas Instruments Inc. (NASDAQ: TXN) that already make Bluetooth chipsets and are developing lower power version.

Another contending technology is known as Zigbee and is widely supported in electric utility circles as way to manage a demand-response electricity network. Silicon Laboratories Inc. (NASDAQ: SLAB) uses a Cortex processor from ARM Holdings plc (NASDAQ: ARMH) in its Zigbee products. ARM’s experience with low-power designs will provide yet another edge for the company. Last year Silicon Labs bought Ember, the industry’s leading developer of Zigbee chipsets.

Intel Corp. (NASDAQ: INTC), Advanced Micro Devices Inc. (NYSE: AMD), and Qualcomm Corp. (NASDAQ: QCOM) all make wireless LAN and WiFi chipsets, and while those will remain as the backbone of an IoE system, there will be a lot more IoE node devices than hub devices like laptops. Qualcomm may be furthest ahead in getting into supplying the low-end node processors.

Intel Corp. (NASDAQ: INTC) short interest fell 1.4% to 235.47 million shares. About 4.8% of Intel’s float is now short.

Advanced Micro Devices Inc. (NYSE: AMD) saw short interest rise by 10.6% to 102.23 million shares, or 16.9% of the company’s total float.

Qualcomm Inc. (NASDAQ: QCOM) short interest rose by 1.2% to 13.82 million shares, which represents 0.8% of the company’s float.

ARM Holdings PLC (NASDAQ: ARMH) saw an 8% decline in short interest to 3.27 million shares, which represents about 0.7% of the firm’s float.

Micron Technology Inc. (NASDAQ: MU) showed a rise of 9.9% in short interest, to 85.42 million shares, or about 8.4% of Micron’s float.

SanDisk Corp. (NASDAQ: SNDK) saw short interest rise by 15.5% to 9.36 million shares, or 3.9% of the company’s float.

Short interest in Broadcom Corp. (NASDAQ: BRCM) rose by 6.2% to 7.35 million shares. That is 1.4% of the total float.

Marvell Technology Group Ltd. (NASDAQ: MRVL) posted a 7.7% drop in short interest, to 5.26 million shares, or about 1.2% of Marvell’s float.

Nvidia Corp. (NASDAQ: NVDA) short interest rose by 1.8% to 26.52 million shares, about 4.5% of the company’s float.

Texas Instruments Inc. (NASDAQ: TXN) saw short interest increase by 23.2% to 28.17 million shares, or 2.6% of the float.

Applied Materials Inc. (NASDAQ: AMAT) short interest rose by 25.9% to 18.95 million shares, which is about 1.6% of the company’s float.

The Market Vectors Semiconductor ETF (NYSEMKT: SMH) showed a rise of 6.9% in short interest to 9.71 million shares.

Shorts piled back into Texas Instruments during this period, likely not expecting the stock to post a new high following its earnings report earlier this week.

A better short bet was Applied Materials. The maker of equipment used in chipmaking took a dive last week before recovering most of the loss this week. SanDisk’s swing was even larger in the past two weeks. Short interest in both these stocks should drop in the current two-week period.

We wanted to take a look at some of the bright spots in the earnings season so far, and these include Intel Corp. (NASDAQ: INTC), Microsoft Corp. (NASDAQ: MSFT), Verizon Communications Inc. (NYSE: VZ), Johnson & Johnson (NYSE: JNJ), Netflix Inc. (NASDAQ: NFLX), Google Inc. (NASDAQ: GOOG) and Peabody Energy Corp. (NYSE: BTU).

Intel Corp. (NASDAQ: INTC) and Microsoft Corp. (NASDAQ: MSFT), the Wintel duo, were not expected to show much in the first quarter. Fourth-quarter PC shipments were down and not expected to improve, while Microsoft’s Windows 8 operating system was generating some buzz, but not much in the way of sales. The two companies offered surprising, if not exciting results. Both companies’ share prices have remained above their pre-release levels even though both remain well within their 52-week ranges. One possible note of caution going forward is that the channels may be stuffed with product that is not moving and we won’t know that until next earnings season.

Verizon Communications Inc. (NYSE: VZ) seems to post a new 52-week high every day. Perhaps there is increasing optimism that the company will buy out Verizon Wireless partner Vodafone Group PLC (NASDAQ: VOD). That buyout would be immediately accretive to revenue and profit, but leave Verizon with a punishing debt load. This may be one of those situations where everything is fine until it’s not.

Johnson & Johnson (NYSE: JNJ), like Verizon, seems to make a new high every day. The company appears to have fixed its quality control issues and many of its most important lines of business are growing again. As we noted last week, we expect the 2.9% dividend yield to get a boost any day now.

Netflix Inc. (NASDAQ: NFLX) absolutely shattered expectations and the shares have been on a tear for the last couple of days, posting another 52-week high today of just under $220. Subscriber numbers were up and much of the credit is going to the company’s original production of “House of Cards.” Original programming is expensive and eats into the bottom line, but given the demands for licensing content from other media houses, Netflix’s original programming should carry it to more growth going forward.

Google Inc. (NASDAQ: GOOG) earnings beat estimates and were just a bit shy on the top line. Paid clicks were up 20%, but the amount the company received for each click fell by 4%. That’s still a net positive, however, and the plain fact is that web searching is massive, and Google simply owns search in much of the world. That’s not likely to change anytime — sooner or later.

Peabody Energy Co. (NYSE: BTU) did not post a profit in the first quarter but its loss was only a third as large at analysts had expected. Peabody and Arch Coal Inc. (NYSE: ACI), which reported in-line results this morning, both expect sales to improve as natural gas prices rise for the rest of this year. The entire coal mining sector could begin to see improvements based on these two miners’ results

We said at the beginning that we were going to cover bright spots so far this earnings season, but there is one storm cloud that deserves to be mentioned as well. As we’ve noted before, Caterpillar Inc. (NYSE: CAT) may be very bad news not just for the mining and heavy equipment sector, but for the whole mining group. The big miners have been struggling with rising costs and surging stockpiles. It could be several quarters before the mining sector sorts itself out.

The company’s net income of $362 million is 37% higher than last year’s net income of $265 million, and includes a tax benefit of $65 million as a result of the reinstatement of the federal research and development tax benefit earlier this year.

For the second quarter, TI expects revenue of $2.93 to $3.17 billion and EPS of $0.37 to $0.45. The consensus estimate calls for $3.04 billion in revenue and EPS of $0.38. For the full year, the consensus estimates call for $12.18 billion in revenue and EPS of $1.62.

TI expects second-quarter revenue related to its legacy wireless products to fall by about $60 million. The company had already announced the winding down of its legacy wireless business. TI plans to put more emphasis on the analog and embedded chip markets.

The company raised its annual dividend to $0.28, for a dividend yield of 3.3% and boosted its share buyback program by $5 billion in the first quarter.

Today’s report is not exciting, but it is stable. Shares won’t move much because the stock is fully valued and growth prospects are slim for the $40 billion chipmaker.

Shares are up about 0.6% at $35.00 in after-hours trading today. The 52-week range is $26.06 to $35.92. Prior to today’s release Thomson/Reuters had a consensus price target of around $34.70 on the company’s shares.

Among the obvious stocks hurt by the collapse are PC makers Hewlett-Packard Co. (NYSE: HPQ), Dell Inc. (NASDAQ: DELL), Microsoft Corp. (NASDAQ: MSFT), Intel Corp. (NASDAQ: INTC) and Advanced Micro Devices Inc. (NYSE: AMD). The drop in sales probably hit Microsoft worst of all this morning, after the company’s stock was downgraded to Sell by analysts at Goldman Sachs. There are several other stocks, though, that will be hurt by the fall in PC sales.

Chip stocks that are taking some lumps today include Nvidia Corp. (NASDAQ: NVDA), down about 2%, and Marvell Technology Group Ltd. (NASDAQ: MRVL), down about 1%. Nvidia’s graphics chip business and Marvell’s disk drive controller shipments are both in jeopardy from falling PC shipments.

Disk drive makers Seagate Technology PLC (NASDAQ: STX) and Western Digital Corp. (NASDAQ: WDC) are both being hit by the lack of PC shipments. Seagate’s shares are down 3.8% and Western Digital’s shares are down about 3% this morning. Storage systems giant EMC Corp. (NYSE: EMC) is down less than 1%, but its business depends less on PC sales than on sales of servers and mainframe computers.

HP’s first quarter shipments were down by 23.7% year-over-year in the first quarter, according to IDC, while Dell shipments fell nearly 11%. Among other PC makers, Acer’s shipments fell more than 31%, and Asus shipments dropped nearly 20%. Not a pretty picture.

Microsoft shares have been hit hard, down 5% to $28.78, in a 52-week range of $26.26 to $32.89. An IDC executive noted, “[T]he Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market.” That’s terrible news for the software giant that cannot seem to break into the smartphone and tablet markets and grab any kind of serious market share.

HP’s shares are down about 6%, at $20.96 in a 52-week range of $11.35 to $25.40. The company managed to hold off Lenovo to maintain its position as the world’s largest PC maker, but that is probably cold comfort today.

Dell is down just 0.5%m at $14.14 in a 52-week range of $8.69 to $16.61. Dell’s price is propped up by the outstanding buyout offer from founder Michael Dell and his partners. But the company’s largest business is clearly in serious trouble.

We also chose to look at how the Market Vectors Semiconductor ETF (NYSEMKT: SMH) has held up.

Intel Corp. (NASDAQ: INTC) short interest rose 2.1% to 238.76 million shares. About 4.8% of Intel’s float is now short.

Advanced Micro Devices Inc. (NYSE: AMD) saw short interest fall by 3.3% to 92.44 million shares, or 15.3% of the company’s total float.

Qualcomm Inc. (NASDAQ: QCOM) short interest declined by 8.2% to 13.66 million shares, which represents 0.8% of the company’s float.

ARM Holdings PLC (NASDAQ: ARMH) saw a 15.6% rise in short interest to 3.55 million shares, which represents about 0.8% of the firm’s float.

Micron Technology Inc. (NASDAQ: MU) showed a drop of 7% in short interest, to 77.7 million shares, or about 7.7% of Micron’s float.

SanDisk Corp. (NASDAQ: SNDK) saw short interest rise by 2.7% to 8.09 million shares, or 3.4% of the company’s float.

Short interest in Broadcom Corp. (NASDAQ: BRCM) fell by 14.5% to 6.93 million shares. That is 1.3% of the total float.

Marvell Technology Group Ltd. (NASDAQ: MRVL) posted a 7.7% drop in short interest, to 5.26 million shares, or about 1.2% of Marvell’s float.

Nvidia Corp. (NASDAQ: NVDA) short interest rose by 20.6% to 26.06 million shares, about 4.4% of the company’s float.

Texas Instruments Inc. (NASDAQ: TXN) saw short interest drop by 14.7% to 22.86 million shares, or 2.1% of the float.

Applied Materials Inc. (NASDAQ: AMAT) short interest dropped by 4.2% to 15.05 million shares, which is about 1.3% of the company’s float.

The Market Vectors Semiconductor ETF (NYSEMKT: SMH) showed a rise of 22% in short interest to 9.08 million shares.

The short bets in this two-week period seem to favor Nvidia and ARM, while appearing to lose interest in Texas Instruments and Broadcom. Qualcomm, the leader in mobile device chips, has strengthened its position in the sector and the short sellers are betting against these competitors. The recent reports that AMD will provide chips for the new Xbox should have an impact on the next short interest report.

Intel Corp. (NASDAQ: INTC) short interest rose 8.3% to 233.9 million shares. About 4.7% of Intel’s float is now short.

Advanced Micro Devices Inc. (NYSE: AMD) saw short interest rise by 11.4% to 95.55 million shares, or 15.8% of the company’s total float.

Qualcomm Inc. (NASDAQ: QCOM) short interest rose 6.3% to 14.88 million shares, which represents 0.9% of the company’s float.

ARM Holdings PLC (NASDAQ: ARMH) saw a 42.3% drop in short interest to 3.07 million shares, which is about 0.7% of the firm’s float.

Micron Technology Inc. (NASDAQ: MU) showed a rise of 14.0% in short interest to 83.5 million shares, or about 8.2% of Micron’s float.

SanDisk Corp. (NASDAQ: SNDK) saw short interest rise by 11.2% to 7.88 million shares, or 3.3% of the company’s float.

Short interest in Broadcom Corp. (NASDAQ: BRCM) fell by 1.9% to 8.1 million shares. That is 1.6% of the total float.

Marvell Technology Group Ltd. (NASDAQ: MRVL) posted a 7.7% drop in short interest to 5.7 million shares, or about 1.3% of Marvell’s float.

Nvidia Corp. (NASDAQ: NVDA) short interest rose by 30.7% to 21.61 million shares, about 3.6% of the company’s float.

Texas Instruments Inc. (NASDAQ: TXN) saw short interest rise 1.6% to 26.79 million shares, or 2.4% of the float.

Applied Materials Inc. (NASDAQ: AMAT) short interest dropped by 8.4% to 15.71 million shares, which is about 1.3% of the company’s float.

The Market Vectors Semiconductor ETF (NYSEMKT: SMH) showed a rise of 17.7% in short interest to 7.44 million shares.

The sharp drop in short interest in ARM Holdings follows on forecasts for a sharp rise in demand for mobile devices. The company’s share of the embedded processor market is also safe, and a new move into low-power servers is beginning to pay off. The company’s ability to execute on its plans is proving to be too much for many short sellers.

In their research report, the Deutsche Bank analysts note that they have observed that investors have afforded large cap analog stocks a safety/early-cycle-driven valuation premium that has reached historic highs. While they admire the quality of the analog names, they expect their premium to lessen as data points more rapidly improve for digital/mixed signal stocks that currently trade at a relative discount but have positive second half of the year seasonality, co-specific product cycles and/or true cyclical leverage.

Simply stated, they feel that the valuation multiples for large-cap analog stocks, specifically Analog Devices Inc. (NASDAQ: ADI), Linear Technology Corp. (NASDAQ: LLTC), Maxim Integrated Products Inc. (NASDAQ: MXIM) and Texas Instruments Inc. (NASDAQ: TXN) have expanded well above historical averages. The analysts also point out that semiconductor investors were last positioned in a similarly “safe” manner during the depths of the Great Recession in early 2009, with that peak soon being followed by the analog premium compressing over subsequent quarters from a 55% premium to nearly a 55% discount. That translates to a big sell signal.

So what stocks are ripe for the buying in this classic sector rotation? Here is the list of the top names from Deutsche Bank:

Mega cap giant Intel Corp. (NASDAQ: INTC) leads off the list. A laggard for years, the stock really has become a value name. It sports a solid 4.20% dividend and a possible departure of the CEO. The Thomson/First Call consensus price objective for Intel is $23.

In the large cap arena, the top pick is Wall St. favorite Broadcom Corp. (NASDAQ: BRCM), with its diverse product range that focuses on voice, video, data and multimedia connectivity for home, office and mobile environments. The Wall St. price target is $40 for Broadcom.

In the mid cap area there are two names for investors to look at. Avago Technologies Ltd. (NASDAQ: AVGO) focuses on chips for the optical sector and just raised its dividend. The consensus price target for the stock is $42.

Based in the Netherlands, NXP Semiconductors N.V. (NASDAQ: NXPI) is also a mid cap favorite. The consensus price target for this mixed signal chip leader is $36.

In the small cap space, the Deutsche Bank research team has four names that investors should look at.

Fairchild Semiconductor International Inc. (NYSE: FCS) has three strong segments to power earnings. The mobile computing, power conversion and automotive divisions drive a diversified revenue stream for this small cap leader. The consensus price target is $18, which would represent a 25% move from current trading levels.

ON Semiconductor Corp. (NASDAQ: ONNN) also makes the small cap list of stocks to buy. It was upgraded yesterday to Buy from Neutral at Goldman Sachs (NYSE: GS) with a price target of $11. The consensus target is $10.

Fabless semiconductor company Monolithic Power Systems Inc. (NASDAQ: MPWR) also makes the grade. The consensus estimate for the stock is $26.

Rounding out the top semiconductor stocks to buy is Silicon Motion Technology Corp. (NASDAQ: SIMO). Based in Taiwan, this fabless semiconductor company designs, develops and supplies a portfolio of multimedia data processing, storage and transfer solutions primarily for consumer electronics. The consensus price target is $20. This could be a huge winner for investors as the price target represents a move of more than 50% from current levels.

The path is clear for the holders of analog semiconductor stocks. If the analysts are right in their rotation call, it is time to sell the analog names and rotate into better value. This is an excellent way to capture profits, but still have semiconductor stocks as a part of a diversified portfolio.

Intel Corp. (NASDAQ: INTC) short interest rose 3.8% to 216.01 million shares. About 4.4% of Intel’s float is now short.

Advanced Micro Devices Inc. (NYSE: AMD) saw short interest drop by 0.8% to 85.74 million shares, or 14.2% of the company’s total float.

Qualcomm Inc. (NASDAQ: QCOM) short interest fell 7.8% to 14 million shares, which represents 0.8% of the company’s float.

ARM Holdings PLC (NASDAQ: ARMH) saw a 19.3% drop in short interest to 5.33 million shares, which represents about 1.2% of the firm’s float.

Micron Technology Inc. (NASDAQ: MU) showed a rise of 10.7% in short interest, to 73.23 million shares, or about 7.2% of Micron’s float.

SanDisk Corp. (NASDAQ: SNDK) saw short interest rise by 5.8% to 7.09 million shares, or 2.9% of the company’s float.

Short interest in Broadcom Corp. (NASDAQ: BRCM) increased 29.3% to 8.26 million shares. That is 1.6% of the total float.

Marvell Technology Group Ltd. (NASDAQ: MRVL) posted a 12.1% drop in short interest, to 6.17 million shares, or about 1.4% of Marvell’s float.

Nvidia Corp. (NASDAQ: NVDA) short interest fell by 13.3% to 16.53 million shares, about 2.8% of the company’s float.

Texas Instruments Inc. (NASDAQ: TXN) saw short interest retreat 1.8% to 26.36 million shares, or 2.4% of the float.

Applied Materials Inc. (NASDAQ: AMAT) short interest dropped by 19% to 17.15 million shares, which is about 1.4% of the company’s float.

The Market Vectors Semiconductor ETF (NYSEMKT: SMH) showed a rise of 13.7% in short interest to 6.32 million shares.

With just a couple of exceptions, short interest fell in chip stocks during the two-week period ending February 28. Good earnings from chip makers in the mobile business cooled off shorts. The bets against Intel and the Market Vectors Semiconductor ETF rose, likely as a hedge against betting the wrong way on ARMH and the others.