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Tech stocks have trended lower with the market correction in the past few weeks. While there are signs that the global economy is slowing down, the drop in some tech stocks seem overdone. Many companies in this sector have cash-rich balance sheets and are still seeing growth. With interest rates at record low levels and plenty of cash around, the tech sector is likely to have above-average takeover activity. Since stock prices and expectations are down significantly in just the past few weeks, it makes sense to consider some high potential stocks that could offer big gains from low levels. One stock that fits this profile is LSI Corporation (LSI), which is worth buying for the following reasons:

1. Although the prospects for LSI Corporation are very positive, the shares have been indiscriminately sold off due to macro issues. This company is a leader in storage and networking semiconductors. LSI recently reported a 19% quarter-over-quarter jump in revenues, led by demand for hard disk drives, flash storage and new product cycles. It announced first quarter 2012 revenues of $622 million and GAAP income from continuing operations of 13 cents per share. The company is poised to benefit from growth trends in computing, data, the cloud, mobile networking and flash. The world demand for technology is likely to increase in the long-run and that means growth for companies like LSI.

2. LSI has a rock-solid balance sheet with about $623 million in cash and no debt. In times of recession, companies that have little or no debt are often best positioned to make it through and come out stronger, since weaker rivals often struggle to invest in product development and research, due to cash constraints.

3. LSI Corporation and many other tech stocks could be poised to benefit from the next release of Microsoft's latest operating system "Windows 8". In the coming weeks and months, consumers and businesses are likely to increase purchases of new computers and other tech products that offer Windows 8, which will possibly create an upgrade cycle. Furthermore, tech companies could see another boost in PC sales, when the back-to-school season starts in about 8 weeks.

Some analysts see gains of about 70% for this stock. Analysts at Mizuho Securities, believe the stock is currently way below fair value and recently set a $10 price target based on higher growth prospects and valuation. This could provide investors with about 70% gains, from current levels.

Key Data Points For LSI From Yahoo Finance:
Current Share Price: $6.30
52-Week Range: $4.75 to $9.20
Dividend: none
2012 Earnings Estimate: 77 cents per share
2013 Earnings Estimate: 83 cents per share
P/E Ratio: about 8 times earnings

Data is sourced from Yahoo Finance. No guarantees or representations are made. Please consult a financial advisor before making investments.

Source: 3 Reasons To Buy LSI Shares For 70% Upside Potential