Xilinx Conducts To The Top

On March 29th, 2015 I Know First published an article on Seeking Alpha examining why Xilinx was a great stock to invest in. Despite falling stock prices, the company had strong products and financial health as well as a strong bullish algorithmic signal. The decreasing trend of the stock, it was argued, should not deter investors, especially because the company had just increased its dividend for the 10th year in a row. Investors have seen an amazing 20.29% increase since this bullish forecast was published.

As we explained in the last post, Xilinx (XLNX) is the world´s largest fabless semiconductor company founded in Silicon Valley in 1984. It designs and develops programmable devices and associated technologies worldwide. It´s known for inventing the field programmable gate array and for being the first semiconductor company with fabless manufacturing model. Its main competitors include Altera and Lattice Semiconductor.

Despite showing an interesting performance during the last ten months, Xilinx shares had high tops and deep bottoms. First of all, the company rallied more than 10 % in May, after showing increasing in its sales, attained 65% of market share. It has achieved a significant milestone at 28nm with over than 1 billion of cumulative product revenue which started shipping in the calendar year 2012, realized over three-quarters faster than any previous node.

Months later, Xilinx shares got hit after lackluster earnings reports that showed demand for microchips was weakening, in part because of the economic slowdown in China. Semiconductor stocks have tended to follow the ups and downs of China´s economy. In addition, disappointing results that week in big technology companies also brought semiconductors back to reality. Xilinx shares lost more than 17% from its high-price in May. As if this was no enough, one month later Xilinx shares suffered a huge strike with the crash in China’s stock market. XLNX went down to 38.78 (lowest price of the year), another 3% of losses.