Barron's notes that while consumer electronics items were hot sellers before Christmas, boosting shares of gadget makers and software developers, the retailers who sold the stuff may not share in the holiday cheer due to heavy discounting amid fierce competition.
Shares of Apple (AAPL) surpassed $200 for the first time ever Wednesday on reports of strong iPod sales. Activision (ATVI) and Nintendo (OTCPK:NTDOY) also rose amid strong sales of the former's Guitar Hero and the latter's Wii.
Amazon (AMZN) sold one Wii every 17 seconds; its shares gained after MasterCard said online sales gained 22.4% year-over year. But brick-and-mortar retailers like Target (TGT) slumped after it warned investors holiday sales revenue would be below expectations. Best Buy (BBY) was a mild gainer, while floundering rival Circuit City (CC) fell hard despite relatively strong store traffic.
Wedbush Morgan analyst Steve Park says strong LCD TV sales should boost shares of power-chip maker Trident Microsystems (TRID) from $6 to $9. He also said low-price notebooks were a hot holiday item; a plus for Hewlett-Packard (HPQ), Sony (SNE), and notebook display-chip makers Monolithic Power Systems (MPWR) and 02 Micro (OIIM). Park says O2 shares should double, and Monolithic should hit $28 from a present $21.