Citi downgraded both Skyworks Solutions and Qorvo to Sell.
Dreamstime
Competition fears led one analyst team to downgrade a pair of specialty-semiconductor stocks.
Nvidia
and
Marvell Technology
remain Buy-rated, however.
In a report Tuesday, Citi analysts downgraded
Skyworks Solutions
(ticker: SWKS) and
Qorvo
(QRVO) to Sell from Neutral, and slashed their price targets to $87 and $78, respectively, from $116 and $116, respectively.
Skyworks stock was trading flat Tuesday at $98.21. Qorvo fell 2.1% to $92.92, the worst performer in the
S&P 500.
The downgrades were prompted by “increased China substitution risk” following the launch of the Huawei Mate 60 phone, which Citi believes uses domestic radio frequency and connectivity chips. Industry researchers learned the main chip inside the phone was manufactured on a 7-nanometer node, which signaled a new milestone for China’s domestic chip-making industry for mass-market consumer device semiconductors, Barron’s previously reported.
Skyworks and Qorvo sales in China have already declined in the last year or so due to weakening smartphone demand, Citi analysts continued, and an uptick in competition from Chinese domestic radio frequency component makers could lead to share loss and weak sales recovery in 2024.
The Citi analysts remain upbeat on Nvidia, noting that the Blackwell B100 GPU launch in the first half of 2024 is “likely the next major stock catalyst.” Marvell stock keeps its buy rating because of the company’s 800 gigabits per second optical artificial-intelligence opportunity, although the Street’s calendar 2024 enterprise-networking and carrier-infrastructure estimates “need to come down another [approximate] 10%.”
Write to Emily Dattilo at [email protected]
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