SWKS - Skyworks Solutions: Buzzwords Do Not Translate To Income

2024-03-17 12:18:31 ET

Summary

• The semiconductor industry has performed well, with top companies like NVIDIA, AMD, Qualcomm, and Broadcom rising over 50%, with NVDA nearly tripling.
• Skyworks Solutions has underperformed, losing 7% of its value despite positive sentiment.
• Skyworks' dependence on Apple and potential risks from Apple seeking other contractors or slowing down pose challenges for its recovery.
• The company has promised to expand into "buzzword" market segments for years but has generally struggled to move away from smartphones.
• A prolonged decline in smartphone sales may lower SWKS's value as investors brace for continued margin pressures.

The semiconductors industry has performed well over the past year, with the popular chip ETF ( SOXX ) rising by ~60% TTM. The top semiconductor companies, NVIDIA ( NVDA ), AMD ( AMD ), Qualcomm ( QCOM ), and Broadcom ( AVGO ) have all risen by over 50%. NVDA has led the pack, increasing by 260% over the past year, boosted by a compounded speculative fervor surrounding crypto mining and AI. Overall, there is a strong correlation between the size of the chipmaker or innovator and its performance, with the most prominent companies performing very well and the smaller ones losing out....

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