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Qorvo Stock Rockets On Apple Contract Win, Broadcom Slips

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Chipmaker Qorvo ( QRVO ) saw its shares gap up on Thursday after disclosing a big contract win with major customer Apple ( AAPL ).

Qorvo shares soared by 16.1% to close at 83.34 on the stock market today . Qorvo broke out of a 12-week consolidation period at a buy point of 81.30. Earlier in the session, Qorvo was up as much as 18.8% to 85.24.

[ibd-display-video id=3119865 width=50 float=left autostart=true] Nomura Instinet upgraded Qorvo stock to buy from neutral and raised its price target to 85 from 75 on the news.

"Qorvo's design win at Apple would secure a lucrative socket that has been held by Broadcom ( AVGO ) for the past two generations" of iPhone, Nomura analyst Krysten Sciacca said in a report to clients. The contract could add $230 million to $305 million in revenue in the second half of calendar 2018, she said. The contract is for a custom mid/high-band power amplifier duplexer.

"Importantly, this design win would signify Qorvo becoming one of only two suppliers of an integrated mid/high-band PAD," she said.

Broadcom stock fell 3.7% to finish at 238.79.

IBD'S TAKE:For the latest news on chip stocks, visit IBD's news page Chip Stocks To Watch And Semiconductor Industry News .

Qorvo also pointed to radio-frequency chip business wins at Huawei and Samsung, she said.

Qorvo's contract wins overshadowed its fiscal third-quarter financial report. Qorvo delivered better-than-expected results for the December quarter, but guided well below Wall Street's targets for the current quarter.

The Greensboro, N.C.-based company reported adjusted earnings per share of $1.69, up 25% year over year, on sales of $845.7 million, up 2%, in the December quarter. Analysts expected $1.60 and $841 million, according to Zacks Investment Research.

For the March quarter, Qorvo guided to non-GAAP earnings per share of $1.05 on sales of $655 million. Analysts were modeling for $1.45 and $788 million, Zacks said.

"Management highlighted soft iPhone and China smartphone (sales) as culprits for the weak outlook," Oppenheimer analyst Rick Schafer said in a report. He rates Qorvo stock as perform, or neutral.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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