Adams Harkness upgraded GSI Group (GSIG

) to strong buy from buy, citing the company's expanding laser systems business.

Analyst Jonathan Dorsheimer says that data points from Asia continue to suggest capacity expansion, mainly driven by Apple's (AAPL

) iPod Nano and greater memory demand in the PC market. As a result of higher profitability in the systems business, he raises his 52 cents 2006 earnings per share estimate to 67 cents. Given an increased 2006 outlook, he believes investors will pay 20 times the 2006 EPS estimate, equating to $14 per share. He encourages investors to purchase the stock at its current levels (around $11.5 per share.)