Semiconductors, the lifeblood of modern electronics, power a myriad of devices, from computers to smartphones. In the current landscape, with the burgeoning field of artificial intelligence (AI), the demand for semiconductors remains robust. While Nvidia and Advanced Micro Devices dominate the semiconductor sector, the spotlight is turning towards lesser-known names like Skyworks and Qorvo that could offer substantial long-term value.
#1. Dissecting Qorvo
Qorvo, a purveyor of innovative radio frequency (RF) solutions, playing a pivotal role in connecting the world. Its comprehensive line-up encompasses amplifiers, filters, duplexers, and switches, crucial components for wireless and broadband communications across various sectors including mobile, defense, automotive, and more.
With a market capitalization of $11.59 billion, Qorvo has seen a 10.3% year-to-date increase, trailing behind the S&P 500 Index’s 15% gain.
In the recent fiscal quarter, Qorvo experienced a substantial 48.7% surge in total revenue to $940.9 million. Despite a decrease in per-share profit compared to the previous year, the full-year revenue for fiscal 2024 soared by 5.6% to $3.76 billion.
Qorvo’s strategic acquisition of Anokiwave promises to bring high-performance silicon integrated circuits that cater to a spectrum of industries, propelling the company towards broader horizons.
Anticipating a 30.5% revenue boost for the first quarter of fiscal 2025, Qorvo remains optimistic about its future growth trajectory amid advancing technologies like 5G and IoT, standing at an attractive valuation of 15x forward 2026 earnings.
#2. Skyworks: Weathering the Storm
Skyworks Solutions, a specialist in high-performance analog and mixed-signal semiconductors, serves diverse markets from smartphones to automotive, embodying resilience despite a rocky financial quarter.
With a market value of $18.6 billion, Skyworks’ year-to-date growth of 4.4% lags the broader market’s ascent.
In the second quarter of fiscal 2024, Skyworks experienced a downturn in revenue due to subdued market demand, resulting in a 9.3% decline. The company, however, maintains a healthy balance sheet with low debt levels and substantial cash reserves.
Offering a dividend yield of 2.34%, surpassing the tech sector average, Skyworks remains committed to shareholders. Despite anticipating lower revenue and earnings for the fiscal year, projections hint at a resurgence in fiscal 2026 with encouraging growth figures.
Trading at 17 times forward earnings, Skyworks presents an enticing prospect with its foothold in burgeoning technologies like 5G and IoT, positioned to rebound from current setbacks.
