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FPGAs are great, but open source they are not. All the players in FPGA land have their own proprietary tools for creating bitstream files, and synthesizing the HDL of your choice for any FPGA usually means agreeing to terms and conditions that nobody reads.
After months of work, and based on the previous work of [Clifford Wolf] and [Mathias Lasser], [Cotton Seed] has released a fully open source Verilog to bitstream development tool chain for the Lattice iCE40LP with support for more devices in the works.
Last March, we saw the reverse engineering of the Lattice ICE40 bitstream, but this is a far cry from a robust, mature development platform. Along with Yosys, also written by [Clifford Wolf] it’s relatively simple to go from Verilog to an FPGA that runs your own code.
Video demo below, and there’s a ton of documentation over on the Project IceStorm project page. You can pick up the relevant dev board for about $22 as well.
This FPGA based build creates an interesting display which reacts to music. [Wancheng’s] Dancing Mandelbrot Set uses an FPGA and some math to generate a controllable fractal display.
The build produces a Mandelbrot Set with colours that are modified by an audio input. The Terasic DE2-115 development board, which hosts a Cyclone IV FPGA, provides all the IO and processing. On the input side, UART or an IR remote can be used to zoom in and out on the display. An audio input maps to the color control, and a VGA output allows for the result to be displayed in real time.
On the FPGA, a custom calculation engine, running at up to 150 MHz, does the math to generate the fractal. A Fast Fourier transform decomposes the audio input into frequencies, which are used to control the colors of the output image.
This build is best explained by watching, so check out the video after the break.
I recently signed up with Udemy which claims to be the world’s largest destination for on-line courses. A rather tall order and time will tell. However they do have a huge selection of courses available covering everything from programming to break dancing!! Some of courses are rather expensive but they regularly offer special promotional rates on a lot of these courses that does make them more attractive.
I have just completed my first course a course created by a reader of this blog by the name of Jordan Christman. Jordan’s course entitled “VHDL and FPGA Development for Beginners and Intermediates” is an excellent introduction to VHDL and FPGA development. Jordan introduces the basics of FPGAs and VHDL before moving onto the development tools used and then takes a hands on approach developing, simulating and running simple designs on target hardware platforms. I can thoroughly recommended this course to anyone wanting to get into FPGA development. Well done Jordan.
Top Analyst Upgrades and Downgrades: Apple, Lumber Liquidators, Take-Two, Urban Outfitters, Apigee, Akamai, Intuit and More
Stocks were indicated higher yet again on Tuesday, with the Dow Jones Industrial Average and S&P 500 hitting new highs. Tuesday’s news may be driven by overseas action rather than earnings, after a 3% gain in Shanghai. The one trend that keeps getting proven is that investors line up in droves to buy stocks on weakness. This trend is now nearing four years old. 24/7 Wall St. reviews dozens of analyst reports each day of the week to find new trading and investment ideas. Some analyst calls cover stocks to buy, and others cover stocks to sell or avoid.
These are Tuesday’s top analyst upgrades, downgrades and initiations.
Apple Inc. (NASDAQ: AAPL) was reiterated as Buy with a $142.00 price target at Bernstein. Here was the Carl Icahn take on how to get Apple to $240, an even more ambitious view than his prior call (but, of course, he is also just talking up his book).
Lumber Liquidators Holdings Inc. (NYSE: LL) was downgraded to Hold from Buy by Cantor Fitzgerald. What is interesting here is that the firm only recently started its positive coverage, but now after earnings it notes that there are just too many regulatory and legal risks to justify its Buy rating, and the negative PR continues to gain momentum while the near-term picture looks cloudier.
Take-Two Interactive Software Inc. (NASDAQ: TTWO) was raised to Buy from Neutral with a $32 price target at Sterne Agee CRT after earnings. Credit Suisse maintained its Neutral rating and cut the price target to $28 from $32. Take-Two shares were up over 7% at $26.00 or so in early-bird trading indications.
Urban Outfitters Inc. (NASDAQ: URBN) was downgraded to Neutral from Overweight at JPMorgan after poor earnings and guidance. It was maintained as Buy at Mizuho, but the target was cut to $36 from $43. Janney Capital Markets maintained its Buy rating but cut its fair value estimate to $45 from $48 in the call. Piper Jaffray downgraded it to Neutral from Overweight and slashed its price target to $36 from $53. Shares were down almost 15% around $34.80 in early Tuesday trading indications.
Apigee Corp. (NASDAQ: APIC) saw its quiet period end. It was started as Outperform with a $21 price target (versus a $14.42 close) at Credit Suisse. The firm said that its platform, leadership and domain expertise could drive strong, sustainable new customer and usage growth. JMP Securities started it as Outperform with a $19 price target. Nomura started it as Buy with an $18 price target. JPMorgan started it as Neutral and just with a $15 price target. Morgan Stanley started it as Overweight with a $19 price target.
ALSO READ: 4 Stocks That Should Thrive Under Higher Interest Rates
Other key analyst upgrades and downgrades for Tuesday were as follows:
Akamai Technologies Inc. (NASDAQ: AKAM) was downgraded to Perform from Outperform at Oppenheimer.
Carlisle Companies Inc. (NYSE: CSL) was raised to Buy from Neutral at Goldman Sachs.
Enphase Energy Inc. (NASDAQ: ENPH) was raised to Strong Buy from Buy and it was given a $20 price target (versus a $10.71 close) at Needham.
Fifth Third Bancorp (NASDAQ: FITB) was raised to Outperform from Perform with a $25 price target (versus a $20.52 close) at Oppenheimer.
Glu Mobile Inc. (NASDAQ: GLUU) was reiterated as Buy and the price target was raised to $9.00 from $7.00 at Stifel.
Healthways Inc. (NASDAQ: HWAY) was downgraded to Hold from Buy at Stifel.
International Flavors & Fragrances Inc. (NYSE: IFF) was started as Outperform with a $150 price target (versus a $115.28 close) at BNP Paribas.
Intuit Inc. (NASDAQ: INTU) was reiterated as Outperform and the price target was raised to $120 from $105 at RBC Capital Markets.
ALSO READ: 5 Analyst Stocks Under $10 With Massive Upside
MasterCard Inc. (NYSE: MA) was raised to Overweight with a $110 price target (versus a $93.08 close) at Pacific Crest.
NetEase Inc. (NASDAQ: NTES) was raised to Buy from Neutral at Citigroup.
Numerex Corp. (NASDAQ: NMRX) was downgraded to Hold from Buy at Needham.
Royal Caribbean Cruises Ltd. (NYSE: RCL) was raised to Overweight from Neutral at JPMorgan.
Sysco Corp. (NYSE: SYY) was raised to Outperform from Neutral and the price target was raised to $43 from $38 at Credit Suisse.
Xilinx Inc. (NASDAQ: XLNX) was raised to Overweight from Sector Weight with a $60 price target (versus a $46.61 close) at Pacific Crest.
In case you missed Monday’s top analyst upgrades and downgrades, they were in shares of BP, Chevron, Chesapeake Energy, GoPro, Yelp and about a dozen more stocks.
We also had more detailed coverage on five standout stocks with Buy ratings and big upside to analyst price targets: Netflix, PDC Energy, Penn Gaming, Schnitzer Steel and WhiteWave Foods.
ALSO READ: Major Portfolio Changes for Warren Buffett and Berkshire Hathaway
Market gossip is that ALTR recently refused a friendly offer from INTC at $53 a share.
Speculation resurfaced yesterday with rumors that talks have started up again.
The catalyst seems to be the fact that serial acquirer Avago (AVGO–I own shares) appears to be considering a bid for ALTR’s rival Xilinx (XLNX).
AVGO seems to have a knack for finding firms that have excellent technology but which, for one reason or another, find it difficult to achieve consistent profit growth. AVGo buys them, reorganizes them and puts the profit machine into high gear.
In this case, the sub-industry involved is the sleepy world of field programmable gate arrays (FPGAs), dominated by the cozy duopoly of ALTR and little brother XLNX. AS the name suggests, FPGAs are chips whose program structure is not hard-wired (those are application-specific integrated circuits–ASICs). So they can be reprogrammed, upgraded, debugged…even after they’ve been put into machines that are now in use. This allows manufacturers to get, say, cutting-edge telecom equipment into customers’ hands very quickly. The drawback is cost.
The AVGO move suggests the FPGA arena is about to become considerably more competitive. AVGO/XLNX would be four times the size of ALTR, implying easier access to capital and the ability to offer a much wider variety of products to customers than ALTR. This suggests ALTR realizes the status won’t be quo for much longer and it needs to be part of a bigger entity in order to compete.
To my mind, the big winner in all this would be INTC.
It’s graduation time, and you know what that means! Another great round of senior design projects doing things that are usually pretty unique. [Bruce Land] sent in a great one from Cornell where the students have been working on a project that uses FPGAs and a few video cameras to keep score of a ping-pong game.
The system works by processing a live NTSC feed of a ping pong game. The ball is painted a particular color to aid in detection, and the FPGAs that process the video can keep track of where the net is, how many times the ball bounces, and if the ball has been hit by a player. With all of this information, the system can keep track of the score of the game, which is displayed on a monitor near the table. Now, the players are free to concentrate on their game and don’t have to worry about keeping score!
This is a pretty impressive demonstration of FPGAs and video processing that has applications beyond just ping pong. What would you use it for? It’s always interesting to see what students are working on; core concepts from these experiments tend to make their way into their professional lives later on. Maybe they’ll even take this project to the next level and build an actual real, working ping pong robot to work with their scoring system!
Altera Announces New Spectra-Q Engine for Industry-Leading Quartus II Software to Accelerate FPGA and SoC Design
Altera Corporation unveiled its Spectra-Q™ engine, a new technology at the heart of the company’s proven Quartus® II software, to improve design productivity and time-to-market for next-generation programmable devices. The Spectra-Q engine extends Altera’s Quartus II software leadership with new capabilities that deliver unprecedented compile time improvements, versatile and fast-tracked design entry, and drop-in IP integration. Now customers can design and implement at higher levels of abstraction for significantly faster design cycles to meet the next generation of design opportunities. Additional information on the Spectra-Q engine is available on the http://www.altera.com/spectraq webpage.
“As FPGAs and SoCs deliver dramatically increased capabilities with multi-million logic element devices, support for hundreds of interface protocols, and new hardened functional blocks, the productivity of software design tools must scale at a much faster pace than just logic element counts,” said Alex Grbic, senior director of Software and IP Marketing at Altera. “The Spectra-Q engine is a game-changing combination of software technologies that dramatically accelerates the design process by reducing designs iterations, while continuing to deliver the industry’s fastest compile times.”
The Spectra-Q engine features faster algorithms and allows for incremental design changes without needing to perform a full design compile. The engine also features a hierarchical database that enables users to preserve placement and routing information of IP blocks while making changes in other parts of the design. This helps ensure stable designs, eliminates unnecessary timing closure efforts and reduces compile times. The new engine also includes a common high-level design compiler for better quality of results and tighter integration between the Quartus II software and a variety of different front-end tools.
Introducing BluePrint™ Platform Designer
Built on top of the Spectra-Q engine is an industry-first platform design tool called BluePrint that allows designers to perform architectural exploration and assign interfaces with greater efficiency. The tool reduces design iterations by 10X by allowing designers to explore and create legal IO placements up-front with real-time fitter-checking. The tool also includes a clock and core planning feature that greatly reduces the number of design iterations needed for timing closure.
Versatile and Fast-tracked Design Entry
The new Spectra-Q engine also fast-tracks design entry for software, hardware and DSP designers alike. With multiple versatile design flows, designers can target FPGAs with greater efficiency in the language or design environment they prefer. In addition to providing support for the latest HDL languages, the new engine is designed to support Altera’s new A++ Compiler for HLS™ (high level synthesis) to create IP cores from C or C++ which significantly boosts productivity through faster simulation and IP generation.
Quartus-II Software and IP Version 15.0 Released
Altera also released its Quartus II software version 15.0 today, the FPGA industry’s #1 software in performance and productivity. With this latest release, customers can take advantage of Altera’s proven software tools which deliver industry-leading compile times. Altera continues to expand its optimized IP offering with the latest standard-based cores to enable maximum design productivity. The Quartus II software v15.0 introduces new Hybrid Memory Cube and HDMI 2.0 MegaCores for the company’s Arria® 10 FPGAs and SoCs. The portfolio also includes an upgrade in features and device support for the company’s popular JESD204B core to update Arria V support to 9.255Gbps as well as Cyclone® V support up to 5Gbps. IP debug toolkits for external memory interfaces (EMIF) and PCI Express are also available to help designers rapidly prototype and expedite qualifications with additional access points to perform test and debug on IP cores.
Pricing and Availability
The Spectra-Q engine is available as an early access program. Customers interested in participating in the program should contact their local sales representative. Both the Subscription Edition and the free Web Edition of the Quartus II software v15.0 are now available for download at http://www.altera.com/download. Altera’s software subscription program consolidates software products and maintenance charges into one annual subscription payment. Subscribers receive Quartus II software, the ModelSim®-Altera edition, and a full license to the IP Base Suite, which includes Altera’s most popular IP cores. The annual software subscription is $2,995 for a node-locked PC license and is available for purchase at Altera’s eStore.
Altera Corporation : www.altera.com
Stocks were indicated slightly higher on Monday morning after a solid week put the markets within striking distance of all-time highs again. If there is one trend that has remained in place, it is that investors keep buying their favorite stocks during each pullback.
24/7 Wall St. reviews dozens of research reports from analysts each day in order to get new trading and investment ideas for its readers. Some analyst reports cover stocks to buy, and some cover stocks to sell or avoid.
These are this Monday’s top analyst upgrades, downgrades and initiations.
Allscripts Healthcare Solutions Inc. (NASDAQ: MDRX) was raised to Neutral from Underweight and the price target was raised to $12 from $9 (versus a $12.59 close) at Piper Jaffray.
Ameren Corp. (NYSE: AEE) was raised to Buy with a $49 target (versus a $42.32 close) at Argus.
American Express Co. (NYSE: AXP) was downgraded to Neutral from Buy and the price target was cut to $82 from $91 at Nomura.
Apple Inc. (NASDAQ: AAPL) was started as Buy with a $160 price target (versus a $130.28 close) at Brean Capital. What should stand out here about this analyst call is that it is on the same morning as earnings, which are due after the close. 24/7 Wall St. has shown that Apple needs to have sold roughly 60 million iPhones in the quarter. Also, the formal earnings report is likely to be trumped by a dividend hike and larger stock buyback plan. Apple has a consensus analyst price target of $142.13, and the highest official analyst price target is up at $185.
ALSO READ: The 5 Most Shorted NYSE Stocks
Celladon Corp. (NASDAQ: CLDN) is down roughly 70% after its drug failed to meet primary and secondary endpoints. Roth Capital Partners downgraded the stock to Neutral from Buy with a $2 price target (versus a $13.68 close and less than $4 in the premarket). Wedbush Securities downgraded it to Neutral from Outperform, and the price target was slashed to $3 from $29 in the call.
DaVita HealthCare Partners Inc. (NYSE: DVA) was raised to Outperform from Neutral with a $95 price target (versus a $83.91 close) at Baird.
Helmerich & Payne Inc. (NYSE: HP) was raised to Buy from Neutral with a $85 price target at Goldman Sachs.
Marathon Oil Corp. (NYSE: MRO) was reiterated as Outperform at Credit Suisse, and the price target was raised to $36 from $32 (versus $30.33 close).
Marvell Technology Group Ltd. (NASDAQ: MRVL) was downgraded to Neutral from Buy and the price target was cut to $13.00 from $18.00 (versus a $14.31 close) Ladenburg Thalmann.
Newmont Mining Co. (NYSE: NEM) was raised to Outperform from Neutral and the price target was raised to $30 from $26 (versus a $24.98 close) at Credit Suisse.
ALSO READ: How Analysts Rate Amazon, Google Microsoft After Earnings
NRG Yield Inc. (NYSE: NYLD) was started as Hold with a $55 price target (versus a $51.36 close) at Evercore ISI.
Oclaro Inc. (NASDAQ: OCLR) was raised to Buy from Hold with a 43 price target (versus a $1.87 close) at Needham.
Oceaneering International Inc. (NYSE: OII) was downgraded to Neutral from Buy and its price target was cut to $58 from $62 at Goldman Sachs.
Procter & Gamble Co. (NYSE: PG) was downgraded to Underperform from Outperform at CLSA.
Quantum Fuel Systems Tech Worldwide Inc. (NASDAQ: QTWW) was started as Market Perform and with a $3.25 price target (versus a $2.90 close) at Cowen.
Stratasys Inc. (NASDAQ: SSYS) was downgraded to Hold from Buy and the price target was cut to $51 from $82 (versus a $51.28 close) at Canaccord Genuity. The firm warned that a lingering slowdown in the core business is likely to lead to additional estimate reductions, undermine confidence in the company’s long-term revenue growth target of 25%+ and lead to sustained multiple compression given an expectation for slower secular growth.
3D Systems Corp. (NYSE: DDD) was downgraded to Hold from Buy and the price target was cut to $27 from $50 (versus a $27.23 close) at Canaccord Genuity. As a reminder, 3D Systems warned on its guidance on Friday, and now we have a new 52-week low on Monday after shares slid to less than $27. The 3D Systems downgrade is based on lower expectations for long-term growth for the core business, based on the pre-announcement and feedback from resellers and other industry participants. The firm’s estimates were cut on the first quarter shortfall and lower expectations for growth through the 2016 forecast horizon.
Telecom Italia SpA (NYSE: TI) was downgraded to Neutral from Buy at Bank of America Merrill Lynch.
Texas Instruments Inc. (NASDAQ: TXN) was raised to Strong Buy from Market Perform with a $62 price target (versus a $54.73 close) at Raymond James.
ALSO READ: 7 Oil and Gas Stocks Analysts Want You to Buy Now
Travelers Companies Inc. (NYSE: TRV) was raised to Outperform from Market Perform and the price target was raised to $119 from $107 (versus a $103.95 close) at FBR Capital Markets. Investors might want to keep in mind that the 52-week high is $110.49 and the consensus analyst target price is $107.68. We would also point out that the prior street-high target is $117.
Twitter Inc. (NYSE: TWTR) was downgraded to Neutral from Buy and the price target was cut to $50 from $58 at SunTrust Robinson Humphrey. Twitter is expected to report earnings on Tuesday, which makes the timing of this downgrade a bit interesting.
YPF S.A. (NYSE: YPF) was raised to Overweight from Neutral with a $40 price target (versus a $30.15 close) at JPMorgan.
Xilinx Inc. (NASDAQ: XLNX) was reiterated as Buy with a $50 price target (versus a $42.88 close) at Argus.
Walt Disney Co. (NYSE: DIS) was raised to Buy from Neutral at Guggenheim, and the price target was put at $127 (versus a $109.53 close). Investors should know that this $127 target price now counts as the street-high target as the prior highest call was listed as $126. Also, the consensus price target was $108.96 prior to this call.
24/7 Wall St. has shown how analysts are now rating Amazon, Google, and Microsoft after their earnings. This included new ratings and a summary on each report.
From this weekend, we have eight analyst stocks trading under $10 with massive upside price target calls. In case you missed out on Friday’s top analyst upgrades and downgrades, they included Amazon.com, Best Buy, Cisco Systems, Microsoft, Nike, Target, Weatherford International and more.
The Philips Ambilight – a bunch of rear-facing RGB LEDs taped to the back of a TV – is becoming the standard project for anyone beginning to tinker with FPGAs. [DrX]’s is the best one we’ve seen yet, with a single board that reads and HDMI stream, makes blinkey lights go, and outputs the HDMI stream to the TV or monitor.
[DrX] is using an FPGA development board with two HDMI connectors – the Scarab miniSpartan6+ – and a strand of WS2801 individually addressable RGB LEDs for this project. With a bit of level shifting, driving the LEDs was easily taken care of. But what about decoding HDMI?
Most of the project is borrowed from a project that displays a logo in the corner of a 720p video stream. The hardware is the same, but for an Ambilight clone, you need to read the video stream and process it, not just write to it. By carefully keeping track of the R, G, and B values for each pixel along with the pixel clock, the colors along the edge of a display can be averaged. It’s not as difficult or as memory-intensive as building a frame buffer; nearly all of the picture data is thrown out when assembling the averages around the perimeter of the display. It does work, though.
After figuring out the average color around the perimeter of the display, it’s just a simple matter of driving the LEDs. Tape those LEDs to the back of a TV, and there’s an Ambilight clone, made with an FPGA.
[DrX] has a few videos of his project in action. You can check those out below.
If you have not already signed up, go on over to uReddit or P2PU and join the online class to get weekly updates about each lesson as they are taught.
Top Analyst Upgrades and Downgrades: Altera, Amazon, Chipotle, Halliburton, MGIC, Nokia, SAP, Teva and More
Stocks were down slightly on Wednesday, after two days of being indicated higher. The trend that has remained in place for almost four years now is that investors keep buying stocks on weakness. 24/7 Wall St. reviews dozens of research reports from analysts each day in order to get new trading and investment ideas for its readers. Some analyst reports cover stocks to buy, while others cover stocks to sell or avoid.
These are this Wednesday’s top analyst upgrades, downgrades and initiations.
Agrium Inc. (NYSE: AGU) was downgraded to Sell from Neutral with a $95 price target (versus a $105.14 close) at Citigroup.
Altera Corp. (NASDAQ: ALTR) was downgraded to Neutral from Overweight with a $42 price target (versus a $43.24 close) at Piper Jaffray.
Anadarko Petroleum Corp. (NYSE: APC) was started as Buy with a $104 price target (versus a $92.56 close) at Nomura.
Amazon.com Inc. (NASDAQ: AMZN) was raised to Buy from Neutral at a firm called Monness Crespi Hardt.
Apache Corp. (NYSE: APA) was started as Reduce with a price target of $63 (versus a $68.37 close) at Nomura.
Chipotle Mexican Grill Inc. (NYSE: CMG) was downgraded to Market Perform from Outperform at Raymond James. Sterne Agee reiterated its Buy rating and $766 price target. Credit Suisse maintained its Outperform rating but lowered its target price to $770 from $785.
Grupo Aval Acciones Y Valores S.A. (NYSE: AVAL) was raised to Buy from Neutral at Goldman Sachs.
ALSO READ: 8 Analyst Stocks Under $10 With Massive Upside Calls
Halliburton Co. (NYSE: HAL) was reiterated as Outperform and the price target was raised to $56 from $48 (versus a $47.05 close) at RBC Capital Markets.
Lam Research Corp. (NASDAQ: LRCX) was maintained as Sector Perform and the price target was lowered to $76 from $82 (versus a $77.84 close) at RBC Capital Markets.
Marathon Oil Corp. (NYSE: MRO) was started as Buy with a $36 price target at Nomura.
Masco Corp. (NYSE: MAS) was raised to Outperform from Market Perform and the price target was raised to $35 from $28 (versus a $26.35 close) at FBR Capital Markets.
MGIC Investment Corp. (NYSE: MTG) was reiterated as Market Perform but the price target was raised to $11 from $9 (versus a $10.47 close) at FBR Capital Markets.
Nokia Corp. (NYSE: NOK) was raised to Overweight from Equal Weight at Barclays. Just this week we noted how reception to the Alcatel-Lucent buyout is starting to dry up.
ALSO READ: 4 Biotech Stocks With 50% to 100% Upside Targets
Packaging Corp. of America (NYSE: PKG) was raised to Buy from Hold but the price target was cut to $80 from $86 (versus a $69.02 close) at Deutsche Bank.
Regions Financial Corp. (NYSE: RF) was downgraded to Sector Perform from Outperform with a $11 price target (versus a $9.58 close) at RBC Capital Markets.
RSP Permian Inc. (NYSE: RSPP) was started as Buy with a $34 price target (versus a $28.24 close) at Wunderlich.
SAP A.G. (NYSE: SAP) was raised to Buy from Neutral at Bank of America Merrill Lynch.
Tempur Sealy International Inc. (NYSE: TPX) was started as Outperform with a price target of $70 (versus a $57.88 close) at Wedbush.
Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) was reiterated as Buy at Argus, but the price target was raised to $75 from $64 (versus a $64.16 close) based on better returns down the road from M&A activity.
ALSO READ: Why Hasbro Is a Buy, and Mattel Is a Sell
Yum! Brands Inc. (NYSE: YUM) was reiterated Buy and with a $95 target at Janney Capital Markets.
In case you missed out on Tuesday’s top analyst upgrades and downgrades, they were in shares of GE, IBM, Bristol-Myers Squibb, Encana, Halliburton, Rio Tinto, WhiteWave Foods and a dozen more companies.
Stocks gapped up at the open but quickly gave way. The Dow is currently off 56 pts and the SPX is down .28%. Utilities and REITs are getting hit again, along with most bonds. In fact, utilities are one of the worst performing groups this year, down 6.5%. Consumer discretion (i.e. retailers and restaurants) and healthcare are leading, up 5-7%. Commodities are broadly higher on the day. WTI crude oil is rebounding a bit from yesterday’s selloff, back up over $51/barrel. Brent crude, at $57/barrel, has seen its spread over WTI shrink quite a bit recently and that means lower gasoline prices for US consumers. Natural gas is up today but has fallen to $2.50/MMBtu from about $4.00/MMBtu a year ago. As I mentioned, bonds are lower and yields are up. The 5-year Treasury yield is up to 1.37% and the 10-year is trading at 1.93%.
Earnings season is upon us. S&P Capital IQ says first quarter total revenue for S&P 500 companies will likely fall 1.1% y/y , and earnings per share (EPS) will fall 3.1%. (As an aside, consensus EPS forecasts were roughly -5.5% just a week ago!) Five out of the 10 sectors will post negative growth, led by energy, consumer staples and utilities. Excluding energy, S&P 500 earnings would be up over 5%. The research firm notes the second half of the year will be stronger. Bulls are banking on a long-awaited boost in consumer spending, and also better economic data.
Bloomberg’s Consumer Comfort Index climbed last week to 47.9 from 46.2 in the prior week. That’s the highest level since May 2007. This is probably a reflection of a better job market and lower gasoline prices. Consumer balance sheets are stronger these days. The savings rate is up to a 2+ year high, and household debt levels are falling. In fact, the household debt to disposable income ratio is down to levels not seen since 2003.
The Assn. of Individual Investors Bullish (AAII) Sentiment Index has been very weak this year. The index, which surveys retail investors, has fallen from the low 50s to just 29 today. It’s now very close to the 1-year low of 27. So investors are very skeptical of this market. Note that the lowest index value during the financial crisis was 19, reached in March 2009 right before the market began to recover.
Intel (INTC) has broken off talks to acquire Altera (ALTR). Bloomberg ways Intel offered $54/share in cash for the company, which was rejected. Before the talks were reported by the media, Altera’s stock was trading around $35/share. So I guess a 50% premium wasn’t good enough for Altera.
Easy come, easy go. That is what the rumor mill around the world of mergers and acquisitions will tell you. The earlier reports that Intel Corp. (NASDAQ: INTC) was in talks to acquire Altera Corp. (NASDAQ: ALTR) appear to have come to nothing. This is likely to have a ripple effect in the related areas in the semiconductor space.
CNBC’s David Faber broke the news on Thursday morning that talks have ended, due to an inability to come to the right terms. What is interesting is the price that Faber talked about — he said in the low $50s, which means a $50.00 floor was likely.
24/7 Wall St. was always concerned about the reality of this rumored merger. The reason is regulatory oversight. Intel is considered the de facto king of processors in personal computers (PCs), and the company is currently selling its mobile chips at losses as it tries to catch up in the smartphone and tablet markets, around mobile Web use and the Internet of Things.
Another concern is that, as mentioned, this will create a ripple around the chip space. In some ways, it is fairly easy to argue that an acquisition by Intel would create a World War I reaction: if Intel mobilizes, then its rivals have to mobilize. This is why we considered the rumors about ARM Holdings PLC (NASDAQ: ARMH) and Apple Inc. (NASDAQ: AAPL) as driven by the possibility of an Altera-Intel deal.
ALSO READ: 6 Credit Suisse Top Pick Tech Stocks to Buy Now
The immediate fallout was also seen in Altera’s mirror-image competitor, Xilinx Inc. (NASDAQ: XLNX). If Altera was bought by Intel, then maybe another buyer would have wanted Xilinx. There was a slight market cap differential here: Xilinx is worth $11.1 billion and Altera is now worth just under $12 billion, after the sell-off.
On a net-net basis, the merger termination reports here have hurt the chip sector.
Altera is unsurprisingly down the most out of the chip companies. Its stock rose to $45 when the deal was announced, and was down to $42 by Wednesday’s close. Shares were last seen down 5.6% at $39.72, against a 52-week range of $30.47 to $45.00. Analysts have a consensus standalone price target of almost $38 for Altera. Shares were trading around $35 before the Intel rumors surfaced.
Xilinx shares were actually flat at $42.55, against a 52-week range of $36.24 to $53.75. Xilinx shares jumped from $39.98 to $42.32 after the Altera rumors surfaced, and the analyst consensus price target is $42.75.
ARM Holdings shares are down only $0.10 at $50.64, against a 52-week range of $37.75 to $54.64. American depositary shares were trading at $49 prior to Wednesday’s news pop that Apple might be interested in acquiring it. We have warned about some issues here in believing that merger rumor, although anything seems possible in M&A in tech these days. ARM has a consensus analyst price target of $56.65.
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Intel shares were also lower on Thursday morning. Its stock was down 25 cents at $31.06, against a 52-week range of $25.74 to $37.90, and the consensus analyst target price is $34.61.
If you want a reference on what a $15 billion Altera buyout would mean for Intel, it would be easy for the company to do, if regulators were not an issue, as Intel’s market cap is $147 billion.
Easy come, easy go.
The technology rumor mill has been rather active lately. One big tech and hardware rumor of April is that ARM Holdings PLC (NASDAQ: ARMH) could be bought out. What the rumor really points to is that Apple Inc. (NASDAQ: AAPL) could be looking to acquire the company. Anything is possible, but at least some caution needs to be considered here. Investors also should consider that the fuel for this rumor may stem back to whether Intel Corp. (NASDAQ: INTC) really ends up acquiring Altera Corp. (NASDAQ: ALTR).
ARM is the current arms-sale model winner due to its designs being so dominant in smartphones, tablets the Internet of Things, servers, sensors and other embedded devices. It has dozens of key partners, and it will sell to any customer. What is key here, above and beyond that Apple could easily afford the company at any reasonable premium, is that ARM is fabless. It has roughly 3,300 employees and is based in the United Kingdom. Would Apple win by taking on a design shop, knowing that it is possible that other architecture and tech-IP could pass it up in the years ahead?
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ARM’s own profile notes that its customers reported that they had shipped 12 billion ARM-based chips in 2014, an increase of 16% on 2013. Just under half of those chips were said to be shipped into mobile devices, including smartphones and tablets, where ARM has a high market share. An increasing number of chips were shipped into new markets, including enterprise networking infrastructure and embedded intelligent devices, such as microcontrollers and chips for the Internet of Things.
An article from Motley Fool’s U.K. operations gave the logic on Tuesday as to why an Apple-ARM deal might make sense. At least that may be the start of the rumor mill.
The real issue goes right back to Intel and Altera. Investors are still wondering if, or when, a deal will be announced. This merger could easily bring more challenges competitively in what is already a highly competitive chip and processor market globally. The recent collaborative efforts between Intel and Micron Technology Inc. (NASDAQ: MU) just add that much fuel to the fire.
One additional issue in an Apple-ARM deal, and in an Intel-Altera deal, is regulatory hurdles in the United States, Europe and elsewhere. The European Union, which may have different goals than the United Kingdom, seems absolutely emphatic on being as protectionist as it can get away with. Quite simply, it looks as though European regulators are doing everything they can to bide time for European technology companies to keep relevance in the ever-changing world of technology. Have you wondered about all those billions of euro fines that Europe is trying to milk out of U.S. technology giants?
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Apple is the world’s largest company by market capitalization at $731 billion. Some analysts have already hinted that Apple could become the world’s first $1 trillion company. The Dow Jones Industrial Average recently added Apple to its list of 30 giants, so obviously it is hoping that Apple can carry the day to much higher values. Oh, and those bullish analysts are modeling Apple’s growth on a standalone basis rather than with major acquisitions.
What Apple would secure here, if it were to acquire ARM, is a leadership position in the architecture and intellectual property around processors and systems on a chip and the like. Still, being so dominant in the end consumer products might draw a line in the sand with other consumer electronics companies — back to those regulatory concerns.
ARM’s American depositary shares were up almost 4% at $50.70 on about 1.9 million shares after about 90 minutes of trading in New York. The stock has a 52-week range of $37.75 to $54.64, and a consensus price target of $56.65. ARM’s current market cap of $23.7 billion is certainly not too large for Apple. It would also be a way for Apple to use some of its cash that is locked up overseas without having to worry about any 35% repatriation tax.
The question is how much a company will pay to buy $1.3 billion in total revenues from last year. Some $497 million came from licensing, and $535 million came from royalty collections. Thomson Reuters has consensus revenue estimates of $1.47 billion in 2015 and $1.69 billion in 2016. With Apple expected to have revenues of $226 billion in 2015, does spending $23 billion to $30 billion justify adding only another $2 billion in annual revenues in the coming years?
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