The shares of Cypress Semiconductors (CY) are rallying today after Barclays upgraded the stock to Overweight from Neutral, citing the belief the company's USB-C chips will be included in Apple's (AAPL) iPhone 8. The upgrade comes after research firm Craig-Hallum recommended buying the stock on weakness based on its belief that the company's revenue from Nintendo's (NTDOY) Switch console will increase by $20M this quarter.

UP TO BUY: Barclays analyst Blayne Curtis estimated that Cypress would obtain $1.25 in revenue as a result of Apple's decision to incorporate one of Cypress' USB chips in each iPhone 8 device and one in the device's charger. Additionally, the revenue that Cypress obtains from its core Internet of Things business could grow more quickly than its 23%-27% guidance, the analyst stated. Finally, he expects the company's margins to continue rising going forward. Curtis placed an $18 price target on the shares.

BEAT AND RAISE: Cypress' quarter ended in June will easily beat analysts' consensus estimate, partly due to a $20M increase in the company's revenue from the Switch, according to Craig-Hallum analyst Anthony Stoss. He believes that Cypress will obtain $1.50 per iPhone 8 from Apple for its USB-C chips, with the revenue starting to flow in Q3 and beginning to significantly impact Cypress' results in Q4. Stoss believes that fears of double ordering by Cypress' auto customers are overdone. He noted that Cypress said that it had "good visibility" into its orders for the second half of the year and that it expects the growth of its orders to exceed normal seasonal increases. He placed a $17 price target on the shares.

PRICE ACTION: In morning trading, Cypress rose 6.5% to $14.06 per share.