The chip sector rose with the broader market Thursday afternoon, as an analyst touted upcoming product introductions by Nvidia Corp. and Advanced Micro Devices Inc.
The chip sector, as measured by the Philadelphia Semiconductor Index, rose 3.66 points to 405.23 in midday trading. By comparison, the Nasdaq 100 index climbed 6.75 to 1,963.55.
Goldman Sachs analyst James Schneider said in a note to investors that he was "incrementally more positive" on Nvidia Corp.'s medium-term market position after a conference call with a technology consultant.
Nvidia and AMD are expected to launch major new graphic chips in the next two months, Schneider said.
Schneider believes AMD's product is likely to be more competitive than previous releases but Nvidia will likely maintain a performance edge. Nvidia still maintains a substantial lead in workstations and devices used for computing figures, he said.
Shares of Santa Clara, Calif.-based Nvidia Corp. rose 45 cents, or 2 percent to $23.54, while shares of Sunnyvale, Calif.-based AMD rose a penny to $7.09.
However, Schneider warned that Nvidia could lose potential leverage because of Intel's high-performance groups of chips. Intel's upcoming Larrabee product was "still too far away to assess" but could give Intel an advantage, he said.
Shares of Santa Clara, Calif.-based Intel rose 21 cents to $23.87.
Elsewhere, Friedman Billings Ramsey analyst Hosseini Mehdi noted that shares of chip manufacturing equipment makers have gained about 25 percent since he upgraded them in late March, compared with an 18 percent rise for semiconductor makers.
He said his favorite stocks in the chip manufacturing equipment sector are ASML Holdings NV, KLA Tencor Corp., Teradyne Inc. and FormFactor Inc.
Shares of Livermore, Calif.-based FormFactor rose 40 cents to $21.42 while shares of Netherlands-based ASML Holdings rose 54 cents to $30.05. KLA Tencor added 62 cents to $44.76 and Teradyne advanced 11 cents to $13.31.
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