Tech Stock News And Analysis

The company, which makes high-definition multimedia interface (HDMI) transmitters used in digital media devices, said Thursday it expects $68 million to $72 million in first-quarter sales, below expectations for $73.2 million in sales from analysts polled by Thomson Financial.

Jefferies & Co. analyst Adam Benjamin cut his rating on the stock to "Underperform" from "Hold" and recommended investors sell shares due to the industry's slow adoption of next-generation HDMI used in HDTVs, personal computers and DVD players.

The analyst also cited Silicon Image's aggressive revenue guidance, deteriorating prices and margins, eroding computer business, and a challenging TV strategy.

Needham & Co. analyst N. Quinn Bolton cut his rating on the stock to "Hold" from "Buy" based on uncertainty surrounding the company's new product strategy.

"We encourage investors move to the sidelines until valuation becomes more compelling or the DTV market shows signs of adopting Silicon Image's product strategy," Bolton wrote in a note to investors.

Shares of Silicon Image, which have traded between $8.20 and $14.68 over the last 52 weeks, fell $2.85, or 23.4 percent, to $9.32 in afternoon trading on the Nasdaq.

Munich-based Infineon said its "integrated single-chip E GOLD voice" platform will be used by the world's largest mobile phone maker in a selection of its upcoming slate of low-cost phones aimed at entry-level market buyers.

Shares of Infineon rose 10.7 percent to euro11.96 (US$15.53) on news of the deal, the details of which were not released.

The decision by Nokia lifted pressure from Infineon, which had been hampered after its biggest customer, BenQ Mobile, went into bankruptcy last year.

The Nokia deal means the company is back on track, UBS analyst Jonathan Dutton wrote in a research note. He said it is likely Infineon could build on the momentum and strike similar deals with other mobile phone makers in the coming months.

"Nokia aims to further improve the power performance in our entry-level phones and reduce their size," said Soren Petersen, senior vice president of Nokia's Entry Business unit. "Adding Infineon's single-chip solution to Nokia's portfolio of chipset suppliers helps us ensure access to optimized solutions for this important market."

Infineon is one of Europe's biggest producers of the chips that are used to make computers run, expand memory and help other products from phones to automobiles work.

Novatel said Monday it expects net income to be within or above its previous guidance range of 2 cents to 4 cents per share, thanks to surging demand for its wireles communications cards. The company also raised its adjusted earnings range to between 13 cents and 14 cents per share and boosted its revenue projection to $76 million.

The previous forecasts called for adjusted earnings of 7 cents per share on revenue between $61 million and $63 million.

Novatel shares jumped 97 cents, or 8.6 percent, to $12.22 on the Nasdaq during morning trading. The stock has ranged from 48.06 to $12.35 in the past year.

"Fourth quarter revenue growth was driven by increased demand in all three prongs of Novatel Wireless' growth strategy _ PC cards, embedded solutions and Ovation fixed-mobile convergence products _ with the Company's ExpressCard product introduction being the most successful in Company history," the company said in a statement.

On Wednesday, Mountain View, Calif.-based Google reported adjusted profit of $3.18 per share, which topped analysts' expectations of $2.92 per share.

Many analysts were upbeat on the company's prospects and several analysts, like Prudential Equity Group's Mark J. Rowen, raised their price targets. Rowen became the latest analyst to set a price target of $600 or above.

"We believe the fourth-quarter results give us further evidence that growth is decelerating at a slower pace than what the market has priced into the stock, and that management is doing an excellent job of keeping the rate of expense growth below the rate of revenue growth," Rowen wrote in a client note.

Rowen raised his price target to $600 from $575 and kept an "Overweight" rating on the shares.

Merrill Lynch analyst Justin Post also raised his price target by $30 to $560, expecting the company to gain market share in 2007.

"We believe Google will continue to take share in an attractive market, and the company's technology strengths will lead to new opportunities in traditional media, payment processing and on-demand software," Post wrote in a client note, while keeping a "Buy" rating on the stock.

Lehman Brothers analyst Doug Anmuth kept an "Overweight" rating on the shares and expects the company to continue increasing search market share, while expanding into new products and other forms of media.

Anmuth warned, however, investors may focus more on potential impacts of online payment service Checkout and other factors, despite fourth-quarter results. Although quarterly top-line growth was 20 percent, Anmuth said further gains were curbed by Checkout, a lower overall average cost-per-click during the quarter, and adverse seasonality of travel and finance verticals in the U.K. during the quarter.

"We do believe that as Google grows, its business is becoming increasingly complex and there are more moving pieces impacting the model," Anmuth wrote in a client note.

Google gave up $6.80 at $494.70 in premarket activity.