Taiwan Semiconductor, Qorvo, others see boost amid Apple gains
Jun. 12, 2024 12:22 PM ET
By: Chris Ciaccia, SA News Editor
 Hiroshi Watanabe
A slew of Apple (NASDAQ: AAPL)-related semiconductor stocks rose sharply on Wednesday amid positive sentiment for the aforementioned tech giant.
Apple shares rose more than 4% in mid-afternoon trading, becoming the world's most valuable company again, as investors digested the news coming out of its annual developer's conference, particularly related to artificial intelligence.
Those gains buoyed Apple suppliers, including Taiwan Semiconductor (NYSE: TSM), which rose nearly 6%. Bank of America lifted its earnings estimates and price target on the semiconductor foundry giant, citing an expected benefit from Apple.
Apple is Taiwan Semiconductor's biggest customer (accounting for 25% of revenue), so any changes to system-on-a-chip for better privacy should increase chip content, analyst Brad Lin said. Other initiatives, such as the introduction of Private Cloud Compute, are also likely helping the "strong" demand for 3 nanometer nodes in the first-half, despite this being the "low season," Lin said.
"We believe the semi demand upside from Apple can get bigger with its widening AI service, from a relatively low base," Lin wrote.
Other Apple suppliers, including Skyworks Solutions (NASDAQ: SWKS), Qorvo (NASDAQ: QRVO) and Micron ( MU) also saw healthy gains on Tuesday.
Qualcomm ( QCOM), which supplies modems to Apple, rose 2%, while Broadcom ( AVGO) rose 1.5%. Broadcom is slated to report quarterly results after the close of trading.
A number of Wall Street firms were impressed with Apple's AI announcements, with some calling it a "milestone moment" for artificial intelligence.
The integration of summarization, enhanced search, multi-modality, text generation and better photo editing is likely to drive a much broader adoption of AI than it has already seen, D.A. Davidson analyst Gil Luria said, likening it to the switch from Napster to iTunes at the turn of the century. Luria raised his rating on Apple to Buy from Neutral and put on a $230 price target.
Luria also noted that Apple is now the first company to introduce a "meaningful agent capability," letting Siri execute tasks on behalf of the user.
Wedbush Securities analyst Dan Ives described the new announcements as a "flex the muscles' moment" for Chief Executive Tim Cook and team. Ives, who has an Outperform rating and $275 price target on Apple, believes Apple could see a surge in iPhone upgrades later this year as the result of the AI announcements. |
