Business Corpus: TSMC Cuts Outlook After Computer Virus; Applied Materials, Qualcomm UpgradedApple chip supplier Taiwan Semiconductor Manufacturing Co. lowered its revenue forecast for the current quarter after a computer virus hampered its factory lines over the weekend. The post TSMC Cuts Outlook After Computer Virus; Applied Materials, Qualcomm Upgraded appeared first on Investor's Business Daily.

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Apple (AAPL) chip supplier Taiwan Semiconductor Manufacturing (TSM) lowered its revenue forecast for the current quarter after a computer virus hampered its factory lines over the weekend. Meanwhile, a Wall Street firm on Monday turned positive on chip-gear supplier Applied Materials (AMAT) and chipmaker Qualcomm (QCOM).

TSMC on Sunday said third-quarter revenue will be about 3% lower than its prior outlook because of the computer virus outbreak. Its gross profit margin will be reduced by about one percentage point, it said in a news release.

The computer virus struck a number of its computer systems and fab tools on Friday evening. But TSMC contained the problem and found a solution. It expected a full recovery Monday from that attack. However, the temporary production outage caused by the computer virus caused shipment delays and added costs.

Susquehanna Financial Group analyst Mehdi Hosseini on Monday said the setback likely won't affect earnings estimates for the full year.

"We are essentially pushing out about 3% of September-quarter revenue into December-quarter revenue," Hosseini said in a report. He reiterated his positive rating on TSMC stock.

However, the problems at TSMC could delay production of Apple's next-generation iPhones, which are set for introduction next month, Bloomberg reported.

U.S. shares of TSMC fell 1.3%, near 41.15, in morning trading on the stock market today.

Cowen Upgrades Applied Materials, Qualcomm

Cowen analysts upgraded Applied Materials and Qualcomm to outperform from market perform. They raised their price target on Applied Materials to 62 from 60 and on Qualcomm to 80 from 64.

Applied Materials shares rose 1.7%, near 49.70, in morning trading on Monday. Qualcomm climbed 0.3%, near 65.60.

Applied Materials should benefit from a rebound in wafer-fabrication equipment spending, Cowen analyst Krish Sankar said. In a report to clients, he said spending should rise in the second half of 2018 and into 2019.

Weakness in memory-chip factory upgrades have battered the company's stock. But Applied Materials also has exposure to foundry and logic chip businesses, which should provide a buffer, Sankar said.

Plus, expectations for display equipment spending are more reasonable after a reset, he said.

Cowen analyst Matthew Ramsay said the risk/reward on Qualcomm stock is "too favorable to ignore" at current levels.

Ramsay sees Qualcomm benefiting from the 5G wireless upgrade cycle. He also believes Qualcomm will settle its royalty disputes with Apple and Huawei.

Plus, Qualcomm has initiated a $30 billion stock buyback program after its failed acquisition of NXP Semiconductors (NXPI), which should buoy shares, he said.

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