After Skyworks Solutions smashed estimates when it reported earnings late Thursday, shares of the relatively obscure supplier of technology that helps power Apple’s wireless communications in iPhones and iPads soared in Friday trading, up 8.9%.
The chip maker’s executives didn’t mention Apple ‘s name in the conference call or in the company’s quarterly filing with the Securities and Exchange Commission. But when CFO Kris Sennesael said that the company’s largest customer accounted for roughly 70% of the fiscal-first quarter revenue, Wall Street knew that was code for Apple.
“Obviously, it was a great quarter with that large customer that just launched their first 5G phones, which with very rich Skyworks content inside,” Sennesael said.
Raymond James chips analyst Chris Caso wrote in a Thursday note to clients that he was encouraged that Skyworks had a strong quarter because of Apple, and not boosted by sales in China.
“Looking into the fall launch, we’re confident that [Skyworks] will maintain and grow their Apple content (which has been the subject of some debate), and we expect a benefit from improving iPhone units as well as the roll off legacy phones and moving richer content 5G phones down the iPhone stack,” Caso wrote. He raised his target price to $205 from $175, and reiterated his equivalent of a Buy rating.
MacDailyNews Take: A rising tide lifts all boats. Even better is the fact that the GameStop triumph is making hedge funds sell Apple shares to cover their short losses, artificially putting AAPL on a nice discount sale just after all-time record earnings!