Applied Micro Outlook Neutral

Applied Micro Circuits Corporation (AMCC), headquartered in San Diego, California, is a leading provider of high-bandwidth integrated circuits (ICs) for optical telecom networks. The company primarily focuses on designing chips for controlling voice and data transmission in high-speed local area networks (LANs) and wide area networks (WANs). It also caters to automated test equipment (ATE), computing and military applications.

Going forward, management remains concerned about the current macroeconomic conditions. The company is seeing softness in the order patterns from some large telecom customers. Although there was strong demand for transport products in the past few quarters, management indicated that carrier deployments could be lumpy.

Revenues should grow 3.0-3.5% sequentially in the second quarter of fiscal 2009 (ending September), which includes IP revenues of $3 million. We are maintaining our Hold rating with a target price of $8.00.

Posted in Categories: Contributor, External Research, Stocks, Technology.

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