5 Chip Stocks J.P. Morgan Likes

NEW YORK (TheStreet) - Semiconductor stocks such as Intel(INTC) , Texas Instruments(TXN) , Xilinx(XLNX) , Analog Devices(ADI) and ON Semiconductor(ONNN) could see further upside, according to JPMorgan, which believes the PC market may be growing faster-than-expected.

Analyst Christopher Danely notes that inventories are being replenished and hard-disk-drive supply is ramping up. "Our industry checks indicate order rates from the PC end market continue to track ahead of expectations in 1Q12 due to inventory replenishment resulting from faster than expected ramp of hard disk drive supply," Danely wrote in a research note.

The analyst notes that component inventory for the PC market (primarily semiconductors) is getting replenished at a faster-than-expected rate, as worries over the hard disk drive shortage are abating.

Here are five semiconductor stocks that JPMorgan believes have more upside ahead:

Intel

Intel shares have performed well year-to-date, gaining 16.67%, and 38.28% year-over-year.

The chip giant has had exceptional gross margin performance, in the low 60% range, and J.P. Morgan raised its first-quarter earnings estimates for the firm, as Danely believes orders are tracking ahead of estimates. J.P. Morgan expects $13 billion in revenue and gross margins of 64% in the first quarter, compared to Intel's guidance of $12.3 billion and $13.3 billion in revenue, and gross margins of 61% to 65%.

"We are expecting above-seasonal QoQ growth in 2Q12 due to inventory replenishment but roughly normal seasonal growth during 2H12. Moreover, our C12 gross margin estimate of 63.8% is below the midpoint of Intel's guidance of 64.0% due to lower sales," Danely wrote in his research note.