If any stock has become the new bellwether, it’s technology giant Apple Inc. (NASDAQ: AAPL), and with good reason. Not only is the Apple universe a magnet for consumer dollars in multiple silos, the smartphone pioneer continues to break new ground, and the Apple nation breathlessly waits for each new iteration of the now 10-year-old iPhone line.
Apple posted outstanding second-quarter results and offered guidance above Wall Street estimates, so the company appears to be hitting on all cylinders. With the iPhone X and iPhone 8 announcements expected today, top firms on Wall Street are handicapping which vendors are poised to benefit.
A new Deutsche Bank report focuses on six top semiconductor stocks that all should have a piece of the Apple pie.
This stock spiked recently and has come back into a good buy range. 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.
Top analysts believe that the Linear Technology acquisition is a big positive as it helped raise the level of business done with Apple. Analysts think that the company grew content in the iPhone 7 30% year over year, which bodes well for the iPhone 8 business. The Deutsche Bank report noted this:
We presently model Apple a 13% customer in fiscal year 2017 estimates despite our expectation for lower content in the high-end OLED iPhone. We believe that the 3D touch module historically designed by the company since 2015 may not be in OLED iPhones. Thus, the extent to which the company continues to enjoy Apple as a significant customer depends on the mix of iPhone sales and how many people purchase the OLED vs. non-OLED iPhones.
Analog Devices investors receive a 2.2% dividend. The Wall Street consensus price target is $94.10, and shares traded Tuesday morning at $82.15.
This stock has been on fire over the past year and remains a top pick across Wall Street. Broadcom Ltd. (NASDAQ: AVGO) has an extensive semiconductor product portfolio that addresses applications within the wired infrastructure, wireless communications, enterprise storage and industrial end markets.
Applications for Broadcom’s products in its end markets include data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems and displays.
Top Wall Street analysts like the leadership in the mobile, data center and broadband markets, and especially in the radio frequency (RF) arena. Many on Wall Street see a cyclical rebound in industrial and communications demand. Deutsche Bank noted this:
We expect Broadcom’s content in the iPhone to grow +40% year-over-year across higher performance products in RF (FBAR), combo chips, and we expect the company to add content related to wireless charging.
Broadcom investors receive a 1.65% dividend. The consensus price target is $273.81. Shares traded Tuesday at $248.20.
This leader in semiconductors is working hard to scale away from dependence on personal computers, and the Internet of Things is a big part of the shift. Intel Corp. (NASDAQ: INTC) designs, manufactures and sells integrated digital technology platforms worldwide.
The company’s platforms are used in various computing applications comprising notebooks, two-in-one systems, desktops, servers, tablets, smartphones, wireless and wired connectivity products, wearables, retail devices and manufacturing devices, as well as for retail, transportation, industrial, buildings, home use and other market segments.
Earlier this year, Intel announced the purchase of Mobileye for $15.3 billion. The Israel sensor company gives the chip giant a leg up in the autonomous car competition, and it also adds many other capabilities. This is expected to be a big Internet of Things (IoT) segment going forward. Deutsche Bank sees the company expanding with Apple and noted this:
We anticipate that Intel’s mix will increase in next-gen iPhones. We do not anticipate any meaningful change in average selling prices for the company at Apple. We note that Intel’s exposure to Apple iPhones would mainly be within the Client Computing Group, which is ~55% of sales and is forecasted to grow 1% year-over-year by our estimates in calendar year 2017 estimates.
Investors receive a 3.05% dividend. The consensus price objective is $39.79, and shares were last seen trading at $36.10.
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