Despite Slowing Apple Growth, These 4 Chip Stocks Will Be Fine

Technology

Published: January 28, 2016 11:20 am

Last Updated: January 13, 2020 2:26 pm

Wow, Apple Inc. (NASDAQ: AAPL) is the only company in the world that could report huge numbers and still get hammered to the tune of over 5%. While the mega-growth story that the stock has been for almost 10 years may be drawing to a close, it still remains a huge player in the tech world. Many are concerned for how the “somewhat” slower growth will affect vendors to the company.

A new RBC research report acknowledges that on some very important metrics Apple did miss its numbers on Tuesday, but the earnings report and guidance are an overall modest positive for the Apple supply chain, as it should indicate that demand at the company is better than feared. Apple came in just under 75 million iPhone units for the fourth quarter, and RBC estimates 48 million for the March quarter and 45 million for the June quarter, still very solid.

The top chip companies that do business with Apple should be just fine, and here are four investors can consider now.

Analog Devices

This stock has been hit hard and is offering solid entry levels for investors. Analog Devices Inc. (NASDAQ: ADI) is a leader in the design, manufacture and marketing of analog, mixed-signal and digital signal processing integrated circuits for use in industrial, automotive, consumer and communication markets worldwide. It offers signal processing products that convert, condition and process real-world phenomena, such as temperature, pressure, sound, light, speed and motion, into electrical signals.

The company was awarded a nice a product slot in the iPhone as it supplies the processors that enable 3D Touch in Apple products. Analog Devices reportedly will be the sole supplier for the 3D touch processor to Apple, and RBC thinks it did 13% of its fiscal 2015 business with Apple, based on the company comments.

Analog Devices investors receive a 2.6% dividend. The Thomson/First Call consensus price target is $57.94. The stock closed Wednesday at $51.28.