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What: Shares of NetLogic Microsystems
So what: NetLogic's fourth-quarter report beat analyst expectations by a small margin on the revenue line but with a much larger gap on the bottom line. Management credits strong sales to Huawei and Alcatel-Lucent for much of the outperformance, while the order patterns from largest customer Cisco Systems didn't shock one way or the other.
Now what: The Huawei and Alcatel-Lucent accounts are particularly attractive because the companies tend to order advanced, high-margin chips that are good for NetLogic's margins. Rollouts of 4G networks here and across the globe are fueling strong demand for NetLogic's high-end networking chips, and the company is working down its inventory levels very quickly. As a result of all this success, the stock continues to explore brand-new all-time highs.
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