A positive note from an analyst on Analog Devices' (ADI 2.50%) niche in the chip sector sent the company's stock skyward on Tuesday. With that wind under its feet, Analog Devices floated to a more than 2% gain that trading session, easily topping the 0.6% bump of the S&P 500 (^GSPC 0.55%).

Scuttlebutt in China

That note was authored by Bernstein's Qingyuan Lin, who addressed rumors in the market that Texas Instruments was planning to hike prices.

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According to reports, the pundit said that Bernstein's contacts in China -- where the American company has a large manufacturing presence -- have confirmed this speculation. He added that the rumors fueled optimism for analog chipmakers generally, and Analog Devices is a top name in that group.

Lin cautioned, however, that the move might be Texas Instruments' attempt to boost its profit margins, rather than a reaction to a shortage of supplies. That being said, he noted that the analog segment could be on pace for an upcycle. In his view, this will be due mainly to inventory restocking. An upsurge could also result in higher margins for various players, not only Texas Instruments.

Upswing incoming?

This isn't the first note in recent days that has boosted sentiment on Analog Devices; last week, a Citigroup update on the wider semiconductor industry tagged the company as one of its two top picks in the sector. The bank pointed out that "semi" sales were up a robust 24% year over year in April, and selling prices have seen narrower declines than expected.

We might indeed be witnessing the start of an upcycle, and if so, Analog Devices would be a good play on that dynamic.