Morgan Stanley analyst Mark Lipacis warned Tuesday that investors may be overly optimistic about the recovery of the semiconductor industry.
The firm now recommends shareholders sell stock in the industry when it rallies, cutting its industry rating to "cautious" from "attractive."
It specifically cut its rating to "equal weight" from "overweight" on the stocks of Intel Corp. (NASDAQ:INTC), Micron Technology Inc. (NYSE:MU), Altera Corp. (NASDAQ:ALTR) and Xilinx Inc. (NASDAQ:XLNX). It lowered Nvidia Corp. (NASDAQ:NVDA) to "underweight" from equal weight."
"The pace in the recovery in expectations for the group has been unprecedented," Lipacis wrote in a note to Morgan Stanley's clients.