Qualcomm (QCOM) Faces Tablet Bubble Risk Says Macquarie

Starting off coverage of Qualcomm (NASDAQ:QCOM) with a "Neutral" rating, Macquarie Equities Research analyst Shawn Webster said he believes the stock is discounting the majority of the enthusiasm over smartphones and tablets.

Webster said, "Due to the many designs in progress in the smart phone arena, we are concerned “noise” in the supply chain could emerge as not every handset or tablet company building systems will gain share. This adds risk, in our opinion, of a slowdown in chip orders for handsets/tablets in 2H CY11 and increases risk of pricing pressure of the handset devices themselves (to which QCOM is sensitive). Our global handset team also estimates average handset selling prices should significantly decelerate after peaking in 4Q CY10. We note QCOM stock has a long history of becoming 'tired' around these handset price peaks."

Assuming there is no bubble, Webster sees the tablet and smartphone market generating close to $25 billion in revenue for Qualcomm this year, and is growing faster than the overall semiconductor industry, which could reach about 12 percent a year by 2015, against about 4 percent annually for the sector.

Add to that other products Qualcomm has exposure to, such as e-readers, the company could grow at an annual rate of 17 percent a year.

Qualcomm closed Monday at $53.48, down $0.13, or 0.24 percent.

Frontier Oil (NYSE:FTO), Alon USA Energy (NYSE:ALJ) Boosted on Distillate Demand Growth

Frontier Oil (NYSE:FTO) and Alon USA Energy (NYSE:ALJ) had their ratings boosted by Macquarie, which sees distillate demand growth in emerging markets creating a new refining cycle, which they believe has already gained momentum.

Macquarie said the trend will probably last as at least through 2013, "forming the basis for the next bull market that still remains in its early stages."

They added the global refining complex is quickly tightening as a result.

Macquarie increased their rating on Alon USA Energy Inc. (ALJ) to neutral, which closed Monday at $7.81, gaining $0.67, or 9.38 percent. Frontier Oil, which was upgraded to "Outperform," closed at $20.80, up $1.03, or 5.21 percent.

Salesforce.com (NYSE:CRM) Expansion Should Accelerate After Heroku Deal Done

Salesforce.com (NYSE:CRM) appears ready to take things to the next level now that their acquision of Heroku is completed, says Macquarie.

They said, "Together with VMforce, a cloud development framework that targets 6 million Java developers, Heroku will enable Salesforce.com to attract a critical mass of developers, customers and ISVs looking to develop cloud based apps using their language of choice."

Macquarie lowered their 4Q11 EPS estimate from $0.28 to $0.26 and raised their full year 2012 revenue estimate to $1.995 billion, a $5 million increase over the previous estimate.

They lowered their full year 2012 EPS estimate from $1.46 to $1.36, and kept the full year 2013 estimate the same at $1.69.

Salesforce.com closed Tuesday at $135.69, down $0.91, or 0.67 percent. Macquarie have a price target of $165 on them.

AngloGold Ashanti (NYSE:AU) Upgrade Not Enough as Gold Prices Today Plummet

Gold prices today plunged, bringing a lot of gold miners down with it, including AngloGold Ashanti (NYSE:AU), which had been upgraded from "Neutral" to "Outperform" by Macquarie.

Gold for December delivery plunged to $1,336, losing $36.10 at the close of floor trading in New York. It has dropped to as low as $1,332.50 earlier in the day.

That temporarily overcame the outlook for AngloGold Ashanti, as it fell to $45.25,losing $1.77, or 3.76 percent.

Volume was a little heavier than its daily average over the last three months.

Gold prices were down because of a stronger U.S. dollar and China's decision to raise interest rates.