With warnings having started from key leaders in the realm of chip stocks, the question is whether or not you can trust the analysts and the consensus upside.  24/7 Wall St. has gone in and evaluated the leaders in each aspect of the semiconductor sector to see where there is value and where the risks currently lie.  We evaluated the following chip companies: Intel Corporation (NASDAQ: INTC); QUALCOMM Incorporated (NASDAQ: QCOM); Texas Instruments Inc. (NASDAQ: TXN); Broadcom Corp. (NASDAQ: BRCM); NVIDIA Corporation (NASDAQ: NVDA); Advanced Micro Devices, Inc. (NYSE: AMD); Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE: TSM); Freescale Semiconductor Holdings (NYSE: FSL); SanDisk Corporation (NASDAQ: SNDK); Applied Materials Inc. (NASDAQ: AMAT); Lam Research Corporation (NASDAQ: LRCX); and Altera Corporation (NASDAQ: ALTR).

In a further effort to show just how much these have sold off, we have shown the moves in the following key semiconductor ETFs: Market Vectors Semiconductor ETF (AMEX: SMH); SPDR S&P Semiconductor (AMEX: XSD); and the ProShares Ultra Semiconductors (AMEX: USD).  We have also run the same screens in retail, gold and silver miners, conglomerates, industrial giants, and major oil companies with links to those at the end of this article. Here is the screening of value and upside in the chip giants:

Intel Corporation (NASDAQ: INTC) traded at $26.60 with a market value of $129 billion.  The consensus target price for the king of PC processors from Thomson Reuters is $29.75 and the 52-week trading range is $19.16 to $29.27.  This DJIA component’s most recent yield was listed as 3.2%. Intel’s implied upside to the consensus target is 16% and it is worth noting that the consensus target is just above the 52-week high.

QUALCOMM Incorporated (NASDAQ: QCOM) traded at $57.78 with a market value of $99 billion.  The consensus target price from Thomson Reuters is $71.92 and the 52-week trading range is $45.98 to $68.87.  The CDMA giant yields about 1.7% after dividend hikes. The implied upside to the consensus target is just under 25% but we would note that the consensus target is still over $3.00 above the 52-week high.

Texas Instruments Inc. (NASDAQ: TXN) traded at $29.15 with a market value of $33.4 billion.  The consensus target price from Thomson Reuters is $35.80 and the 52-week trading range is $24.34 to $35.30.  The yield here is about 2.3%. TI’s implied upside to the consensus target is just under 23% and that target is still just above its 52-week high.

Broadcom Corp. (NASDAQ: BRCM) traded at $31.85 with a market value of $17.5 billion.  The consensus target price from Thomson Reuters is $43.21 and the 52-week trading range is $27.59 to $39.66.  Broadcom has a paltry yield of only about 1.2%, but its implied upside to the consensus target is about 35%.  Be advised that this consensus target is almost $4.00 above the 52-week high.

NVIDIA Corporation (NASDAQ: NVDA) trades at $12.25 and its market cap is just over $7.5 billion. This graphics processor leader has a consensus target price of $16.64 and the 52-week trading range is $11.47 to $20.05.  NVIDIA pays no dividend and that is something which it should consider changing since it has about $3 billion in cash and liquidity. Its implied upside to the consensus target is about 35% and that consensus target price is well under its 52-week high.

Advanced Micro Devices, Inc. (NYSE: AMD) trades at $6.06 and its market cap is only $4.25 billion despite it being so actively traded. The consensus target price for this distant number-2 in PC processors is $8.55 and the 52-week trading range is $4.31 to $8.71.  AMD has no dividend due to very spotty earnings. Its implied upside to the consensus target is more than 41% if you trust the analysts here and its target price is just under its 52-week high.

Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE: TSM) currently trades at $14.15 for its ADR and Yahoo! Finance shows its market value being about $73 billion.  The consensus target price from Thomson Reuters is $16.70 and the 52-week trading range is $10.75 to $16.15.  The yield is listed as roughly 2.9%. TSM’s implied upside to the consensus target is 18% and the consensus target is about 4% above the 52-week high.

Freescale Semiconductor Holdings (NYSE: FSL) has been battered since its IPO and shares now trade at $9.75 with an implied market value of $2.4 billion.  This private equity backed chip outfit’s consensus target price from Thomson Reuters is all the way up at $17.92 and the 52-week (less than one-year actually) trading range is $9.43 to $20.97.  Freescale has NO DIVIDEND, which makes it stand out against the peer group now.  Still, if you trust the analysts here the implied upside to the consensus target is a whopping 83%!  Trust is hard to come by here, particularly for a company where backers will sell shares along the way into strength.

SanDisk Corporation (NASDAQ: SNDK) trades around $32.50 and its market value is about $7.9 billion.  The king of flash memory’s consensus target price from Thomson Reuters is $44.46 and the 52-week trading range is $31.34 to $53.46.  SanDisk has no current dividend, something which may need to change down the road considering that this is not anywhere close to a new company.  Its implied upside to the consensus target is 37% but the company has had two warnings.

Applied Materials Inc. (NASDAQ: AMAT) currently trades at $10.55 and its market value is $13.6 billion.  The consensus target price from Thomson Reuters is $13.65 and the 52-week trading range is $9.70 to $13.94.  Applied now yields about 3.4% and its implied upside to the consensus target is about 29%.

Lam Research Corporation (NASDAQ: LRCX) is worth more than $4.5 billion today but it is acquiring Novellus Systems, Inc. (NASDAQ: NVLS) for about $3 billion in stock, so it will soon be larger.  Its shares trade at $38.00, its consensus target price is $48.53 and the 52-week trading range is $34.81 to $48.88.  Lam Research pays NO DIVIDEND now and its implied upside is almost 28%.

Altera Corporation (NASDAQ: ALTR) currently trades at $33.90 and its market value is $10.9 billion.  The consensus target price from Thomson Reuters is $41.00 and the 52-week trading range is $30.39 to $48.91.  Altera has a dink yield of only about 1% and we expect a dividend hike in the coming weeks or months. Its implied upside to the consensus target is about 21% and this one is well off highs and the target is almost $8.00 under its 52-week high.

Market Vectors Semiconductor ETF (AMEX: SMH) has undergone a total transformation since it is no longer the Semiconductor HOLDRs.  At $31.25 its range since the change is listed as $28.86 to $36.17.  This ETF is said to have assets of almost $400 million, but that changes based upon inflows and outflows on top of the change in the price.

SPDR S&P Semiconductor (AMEX: XSD) ETS is now one of the longest ETF in chips since the HOLDRS changed.  At $43.50 now, its 52-week range is $40.09 to $59.85 and it still has only about $44 million in assets.  This one peaked in January and the mix of components has made it more volatile than many leaders.  This ETF would now have to rally by more than 37% to hit its 52-week high again.

ProShares Ultra Semiconductors (AMEX: USD) uses leverage of 2-times for its semiconductor trading, so this is one where it will feel just like getting your fingernails ripped out when your timing is wrong. At $33.50, this leveraged ETF has a 52-week range of $26.18 to $46.46. It would have to rally about 39% to hit its 52-week high again.

As you can see, the semiconductor and chip leaders have now pulled back substantially from their highs seen throughout 2012.  The issue to consider is that Dell Inc. (NASDAQ: DELL) and Hewlett-Packard Co. (NYSE: HPQ) have confirmed that PC sales are slowing.  Some of this is due to Apple Inc. (NASDAQ: AAPL) and some of it is due to weakness in Europe, weak PC spending in the Americas, and a slowing of growth in the BRIC nations.  How the Microsoft Corporation (NASDAQ: MSFT) launch of Windows 8 will impact the PC refresh cycle ahead is now another wild card since PC sales guidance is looking softer than anticipated from just a couple of weeks ago.

We also want to warn investors to not just blindly trust the analysts in semiconductor price targets here.  Summer can be a brutal time for chip stocks.  The drop in the ProShares Ultra Semiconductors (AMEX: USD) during the summer of 2011 was about 40% and the drop from the 52-week high in 2011 to that end of summer trough was almost 50%.

The drop in the SPDR S&P Semiconductor ETF (AMEX: XSD) during the summer of 2011 was about 25%, but the drop from the peak in early 2011 here to the trough of late-summer was about 31%.

Summer is a very tough time to invest in chip stocks, and the question now is just how much the slowdown is going to continue taking out of chip stocks.  We would certainly avoid trying to play the game of trying to catch falling knives here, but these are all worth keeping an eye on for those inflection points where the valuations start to adequately discount the warning signs.

Gold & Silver Miners with the Most Upside Value  

Major Oil Companies with the Most Upside Value

Industrials with the Most Upside Value  

Conglomerates with the Most Upside Value

Retail Stocks with Upside 

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JON C. OGG

There are several issues happening almost simultaneously here.  Intel Corporation (NASDAQ: INTC) recently reiterated its guidance and this lends more thought to the PC recovery being sustained.  Even Advanced Micro Devices (NYSE: AMD) signaled that it sees increased demand for PCs and its processors ahead.  The reason is in part due to the Windows refresh cycle as Microsoft Corporation is now just a few months away from its launch of the Windows 8 operating system.

Our big question is simple, yet complicated: How bad will the reports be from Dell and H-P?

Hewlett-Packard Co. (NYSE: HPQ) is in a turnaround and Wall Street refuses to give it any valuation worth noting.  Its value is about 6-times expected earnings.  The chatter has already been telegraphed that some 25,000 or even 30,000 pink slips are going to be handed out at H-P.  That will make its earnings coincide with National Employee Morale Day.  H-P is a DJIA component and it is worth under $44 billion in market capitalization now that its stock is down more than half from the peak in early 2011.  H-P still trades under $22 and its 52-week range is $21.28 to $37.70 against a consensus analyst price target objective of $29.23 that implies about 33% upside.  Thomson Reuters has consensus estimates of $0.91 EPS and $29.92 billion in revenue for H-P.

Dell Inc. (NASDAQ: DELL) is dirt cheap for a tech stock and dirt cheap compared to the market, but against H-P it almost sounds expensive at 7.5-times its forward earnings.  Dell is still just under $15 and its 52-week range is $13.29 to $18.36 against a consensus analyst price target objective of $19.43 that implies 30% upside.  Thomson Reuters has consensus estimates of $0.46 EPS and $14.89 billion in revenue for Dell.

Analysts still seem to prefer Apple Inc. (NASDAQ: AAPL) over Dell and H-P alike if you just pay attention to the media coverage.  What is interesting is that Apple has almost no attention given to its Mac sales at the moment.  It is all about iPads, iPhones, and the coming Apple TV.  Apple shares are finally recovering with a gain of 4% to $551.00 today.  Analysts have a consensus target of $708.55 against the $551 price today.  What is interesting is that Apple’s implied upside is about 28%.

Can it be that analysts actually prefer Dell and H-P over Apple as a group?  That is what the math says on the surface.  The difference is that many of the analysts following Apple are far higher and much more ambitious on Apple than the consensus.

JON C. OGG

What is interesting is that this is all taking place when Apple Inc. (NASDAQ: AAPL) has been a huge disruption force.  Mac sales have grown, but the iPad has been the true disruption as consumers are flocking to the tablet for casual web use and media use and keeping older desktops and/or laptops to use for more heavy issues.

This morning at the J.P. Morgan Global Technology, Media and Telecom Conference came word from AMD’s CEO Rory Read that demand is picking up in the personal computer space.  The pickup was said to be for both 2012 and for 2013, although that is a company prediction.  He even went on to note that the personal computer market will have a single-digit rise this year and that the growth will be back-end loaded for the second half of this year.

The strength is based upon AMD’s Trinity processors for laptops after many key design wins.   AMD shares are up only $0.04 at $6.79 against a 52-week trading range of $4.31 to $8.73 and its market capitalization rate is $4.76 billion.

Now the company just has to go out and execute on its strategy.  Unfortunately, that has always been the hard part for AMD to maintain and that is regardless of the PC sales climate.

JON C. OGG

The company’s CEO could barely contain his enthusiasm:

Kepler GPUs [graphics processing units] are accelerating our business. Our newly launched desktop products are winning some of the best reviews we’ve ever had. Notebook GPUs had a record quarter. And Tegra is on a growth track again, driven by great mobile device wins and the upcoming Windows on ARM launch.

Nvidia, which licenses designs from ARM Holdings plc (NASDAQ: ARMH), may be getting back on track following a couple of weak quarters. Like other ARM licensees such as Qualcomm Corp. (NASDAQ: QCOM), Apple Inc. (NASDAQ: AAPL), and Texas Instruments Inc. (NASDAQ: TXN), Nvidia is profiting from the explosive demand for mobile devices like smartphones and tablets.

The company’s growth prospects are further enhanced by a decision from Microsoft Corp. (NASDAQ: MSFT) to release a version of is Windows 8 operating system for ARM-based processors, the company’s first foray from the x86-designs of Intel Corp. (NASDAQ: INTC) and Advanced Micro Devices Inc. (NYSE: AMD).

Nvidia forecast second quarter revenue of $990 million to $1.05 billion, significantly above the current consensus estimate of $976.2 million. Non-GAAP gross margins are also expected to rise from 50.1% in the first quarter to 51.5% in the second quarter.

The company’s share price is down about -45% since the beginning of 2011. Nvidia’s forward P/E ratio in February of 2011 was north of 63. That has fallen to 13.65 today, indicating an abundance of enthusiasm from investors that the company simply couldn’t deliver on. The situation is changing now, and Nvidia might actually be set to deliver the goods.

Shares are up 9.5% in the pre-market this morning, at $13.58 in a 52-week range of $11.47-$20.52.

Paul Ausick

Arch Coal Inc. (NYSE: ACI) saw a gain of 18.7% in short interest as of for the two weeks ended April 30th. More than 6.6 million shares were added to short interest and 20% of the company’s float is now short. The coal miner’s poor earnings and forecast are to blame.

Short interest in Exco Resources Inc. (NYSE: XCO) rose nearly 12% to more than 33.5 million shares, or 19.3% of the company’s float. The oil & gas driller missed revenue expectations, although it did post a profit. Revenue is more important now however.

Among the largest overall short positions, SandRidge Energy Co. (NYSE: SD) got short interest on 49.5 million shares, nearly 12% of its float and up 6.7% from the previous reporting period. Shares are down more than -33% in the past 12 months, and the small spikes don’t affect short sellers here. The long-term outlook for natural gas continues to call for weak pricing.

E&P company Forest Oil Co. (NYSE: FST) was another recipient of more short interest in late April. Short sellers added about 3 million shares, a 24.7% increase and enough to put nearly 13% of the company’s float short.

Even Exxon Mobil Corp. (NYSE: XOM) didn’t escape. Short sellers added 7.7 million shares to their positions, a 31.8% change to 32 million shares, but still less than 1% of Exxon’s shorts.

The final energy company we’ll look at here is Duke Energy Corp. (NYSE: DUK), where 5.8 million additional shares were added to short positions, bringing total shorts to just over 79 million shares. That’s an addition of 8% and represents 5.9% of Duke’s float. It’s odd to see a utility on this list.

Advanced Micro Devices Inc. (NYSE: AMD)saw short interest in its share rise by 6.5% to more than 70 million shares or 11.9% of the company’s float. AMD continues to suffer from lower-than-expected earnings and revenues.

Short interest in Sanofi (NYSE: SNY) jumped 265% to more 13.4 million shares. While still only about 0.5% of the company’s float, but generic drug sales are hurting the company as is a weak economy in Europe. Neither condition is expected to improve soon either.

Short interest in Pfizer Inc. (NYSE: PFE) also rose sharply, buy 21.4% to reach a total of 63.6 million shares, about 0.8% of the company’s float. Like Sanofi, competition from generics hurts. The company also said it will reduce marketing expenditures on its Lipitor drug.

Nokia Corp. (NYSE: NOK) gets the honor for being the equity with the largest number of short shares, 195 million, which represents 5.2% of the company’s float. The good news is that short interest fell by more than 32 million shares, also the largest change.

More than 75% of Barnes & Noble Inc.’s (NYSE: BKS) float is short, about 19.8 million shares. Short interest in the company grew by just 700,000 shares since mid-April.

Short interest holds more than 42% of grocer SuperValue Inc.’s (NYSE: SVU) shares with a total of 88.5 million shares short, up slightly from two weeks ago.

Short interest in Pitney Bowes Inc. (NYSE: PBI) actually fell slightly , but the company’s total of 50.5 million shares short represents 25.3% of the float and 22 days to cover.

Short interest in for-profit educator DeVry Inc. (NYSE: DV) jumped 123.2% to 3.7 million shares or 6.3% of the company’s float. Another education company, Bridgepoint Education Inc. (NYSE: BPI) posts short interest of more than 9.7 million shares, or 56% of its float.

Paul Ausick

Apple shares are up over $56.00 at $616.74 on last look and we have already seen more  than 1 million shares trade in the pre-market with well over an hour until the open.  Here are some of the moves in the Apple component players:

Advanced Micro Devices Inc. (NYSE: AMD) is up over 1% at $7.40 on thin volume.   Broadcom Corp. (NASDAQ: BRCM) is up 4.6% at $34.42.

LSI Corporation (NYSE: LSI) is indicated up around $8.10 to $8.20 (+1% to +2%) after an $8.03 close.

Marvell Technology Group Ltd. (NASDAQ: MRVL) is down 2.2% at $15.31.

Micron Technology, Inc. (NASDAQ: MU) is up 1.5% at $6.61.

NXP Semiconductors NV (NASDAQ: NXPI) is indicated up about 1% after getting a CNBC tout as a growing Apple supplier for the next generation chips.

Qualcomm Inc. (NASDAQ: QCOM) is up 2.5% at $63.41.

SanDisk Corporation (NASDAQ: SNDK) has warned twice in recent weeks but it is getting some love as well with a gain of 1.7% at $37.10.

Skyworks Solutions Inc. (NASDAQ: SWKS) is up 7% at $25.60.

TriQuint Semiconductor Inc. (NASDAQ: TQNT) is up 10% at $5.67.

When one stock goes up, everyone looks at the other plays out there that benefit too.  When Apple is so big, it leaves a lot of room for growth.

JON C. OGG

Maybe you can blame the less robust economic data or maybe you can still try to claim that no more QE from Ben Bernanke and friends is the reason.  SanDisk Corporation (NASDAQ: SNDK) is down 8.7% at $45.68 against a 52-week range of $32.24 to $53.46.  With a close of $50.05 yesterday, the fears were not very evident in the share price that weak pricing and demand were both there in flash memory.  The price action in the Apple component supplier list below is uniform:

Advanced Micro Devices Inc. (NYSE: AMD) is down 3% at $7.74.

Analog Devices, Inc. (NASDAQ: ADI) is down 1.8% at $38.39.

Broadcom Corp. (NASDAQ: BRCM) is down 2.5% at $37.21.

Cypress Semiconductor Corp. (NASDAQ: CY) is down 2.2% at $14.70.

Fairchild Semiconductor International Inc. (NYSE: FCS) is down 3.2% at $14.10.

Marvell Technology Group Ltd. (NASDAQ: MRVL) is down 2.2% at $15.31.

Micron Technology, Inc. (NASDAQ: MU) is down 5.7% at $7.54.

LSI Corporation (NYSE: LSI) is down 3.4% at $8.48.

ON Semiconductor Corp. (NASDAQ: ONNN) is down 2.8% at $8.47.

Qualcomm Inc. (NASDAQ: QCOM) is down 1.4% at $67.20.

Skyworks Solutions Inc. (NASDAQ: SWKS) is down 4.5% at $26.29.

TriQuint Semiconductor Inc. (NASDAQ: TQNT) is down 3.5% at $6.32.

Apple Inc. (NASDAQ: AAPL) is down only 1.2% at $721.75 but investors have been used to it rising just about every day as analysts take their consensus price targets higher and higher.  The news from SanDisk was bad, but at least the spillover and run-off is not bleeding some of the larger players in the Apple and technology ecosphere too bad.

JON C. OGG

For Intel, the 2011 market share fell by -0.6% year-over-year, while AMD gained 0.7% and VIA lost 0.1%. Sequentially, Intel’s share in the fourth quarter rose by 0.1% to 80.6% and AMD’s share fell -0.1%.

In the mobile (laptop) market, both Intel and AMD were unchanged sequentially, with 82.3% and 17.6% shares, respectively. In the PC server/workstation market, Intel’s dropped -0.8% to 94.3% share and AMD gained 0.8% for a 5.7% share. In desktop PCs, Intel gained 0.3% for a 76.1% share, while AMD dropped -0.3% to a 23.8% share.

Concerning 2012 shipments, IDC had this to say:

IDC’s forecast for PC microprocessor unit shipment growth in 2012 is 5.1%. Since the end of 2011 and through the first quarter of 2012 so far, IDC observes that the hard disk drive shortage that caused PC OEMs to cut back on advanced purchases of PC microprocessors has improved. IDC now believes that the HDD shortage will not be a significant factor in PC shipments in 2Q12. Combined with improving job growth in the United States and stabilization of sovereign debt issues in Europe, IDC may raise this growth rate modestly after the close of 1Q12.

The drop from a 13.2% annual growth rate to a 5.1% annual growth rate is notable, and very likely reflects the expected increase in purchases of tablets. Neither Intel nor AMD yet plays a significant role in that market.

Paul Ausick

Advanced Micro Devices, Inc. (NYSE: AMD) Raised to Buy at Jefferies.

Aixtron SE (NASDAQ: AIXG) Raised to Buy at Deutsche Bank.

Celgene Corporation (NASDAQ: CELG) Started as Buy at Stifel Nicolaus.

Dendreon Corporation (NASDAQ: DNDN) Started as Hold at Stifel Nicolaus.

Digital Realty Trust (NYSE: DLR) Cut to Hold at Jefferies.

eBay Inc. (NASDAQ: EBAY) Cut to Neutral at Credit Suisse.

IntercontinentalExchange, Inc. (NYSE: ICE) named Bull of the Day at Zacks.

Joy Global, Inc. (NYSE: JOY) Cut to Neutral at UBS.

Level 3 Communications, Inc. (NASDAQ: LVLT) Raised to Buy at BofA/ML.

Norfolk Southern Corporation (NYSE: NSC) Cut to Equal Weight at Barclays.

RadioShack Corporation (NYSE: RSH) named Bear of the Day at Zacks.

SeaCube Container Leasing Limited (NYSE: BOX) named as value stock of the day at Zacks.

Veeco Instruments Inc. (NASDAQ: VECO) Raised to Buy at Deutsche Bank.

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JON C. OGG

AMD will at least be able to take some portions of its process making to another foundry, but the details on which functions that is remain unknown as of yet.  The pricing model goes back to a cost-plus model that is based upon a fixed number of wafers per quarter.  AMD is expected to spend much more on its wafers in 2012 versus 2011.

Will AMD use Taiwan Semiconductor Manufacturing Company (NYSE: TSM) for its ‘secondary functions’ in the new deal?  It already makes most of the AMD graphics chipsets.  The graphics market is potentially up for grabs as rival NVIDIA Corporation (NASDAQ: NVDA) looks to move beyond graphic chipsets to have some processor business in tablets and mobile computing devices that are in the post-PC movement.

The big question is whether or not AMD’s gamble was the right move to save on costs or not.  Intel is fab-heavy and can retool its plants almost immediately when it decides to make changes.  For AMD to switch directions, it has to order the change to be made to its partners and go through the waiting process while obligations have to be fulfilled for whatever existing product is being shipped.  Fab-lite means ‘change slow’ even if it means lower operating costs.

In a world where many investors believe that Intel’s processors for PCs have been somewhat held back just so that AMD cannot lose too much business to where they can again assert that Intel is monopoly, you have to wonder.

At $7.47, AMD’s 52-week trading range is $4.31 to $9.17.  If you trust estimates, Thomson Reuters has estimates of $0.65 EPS for 2012 and $0.81 EPS for 2013.  We will see if those estimates hold up after the charges get factored in.

JON C. OGG