Baird analysts favor this stock as they see it as a smartphone content and infrastructure provider as well. Skyworks Solutions Inc. (NASDAQ: SWKS) designs, develops, manufactures and markets proprietary semiconductor products, including intellectual property worldwide.
The company’s product portfolio includes amplifiers, antenna tuners, attenuators, circulators/isolators, DC/DC converters, demodulators, detectors, diodes, directional couplers, diversity receive modules, filters, front-end modules, hybrids, LED drivers, low noise amplifiers, mixers, modulators, optocouplers/optoisolators, phase-locked loops, phase shifters, power dividers/combiners, receivers, switches, synthesizers, technical ceramics, voltage-controlled oscillators/synthesizers and voltage regulators, as well as wireless radio integrated circuits.
Skyworks provides its products for use in the aerospace, automotive, broadband, cellular infrastructure, connected home, industrial, medical, military, smartphone, tablet and wearable markets.
Baird said this about the prospects for 2021:
Skyworks remains a core holding on the 5G secular growth theme. In mobile, we expect 5G smartphone units to more than double in 2021 along with ongoing content increases. Additionally, C band represents an incremental RF content opportunity in 5G phones for 2021. We also expect Skyworks to benefit from Huawei’s share losses via a stronger incumbent position at other smartphone OEMs including Samsung. Besides smartphones, broad markets should experience a very strong reacceleration next year as 5G use cases expand into a variety of applications such as industrial IoT and automotive.
Skyworks Solutions stock investors receive a 1.26% dividend. Baird has set a $180 price target. The consensus target is $161.04, and the last trade for Tuesday was reported at $156.30.
This may be the top stock to own in this fast-growing segment. Twilio Inc. (NYSE: TWLO) provides cloud communications platform that enables developers to build, scale and operate communications within software applications through the cloud as a pay-as-you-go service in the United States and internationally.
The company offers programmable communications cloud software that enables developers to embed voice, messaging, video and authentication capabilities into their applications through application programming interfaces. The company also provides use case products, such as a two-factor authentication solution.
Last year proved solid for Twilio, and the analysts said this:
Because of the broad diversification across industry and product, its exposure to impacted industries turned out to be far less than anticipated and the benefits from other industries more meaningful. Digital transformation has significantly accelerated, and companies now more than ever need to invest in digital customer engagement. Twilio has established itself as the undisputed leader in communication APIs, with a widening geographic, product and developer moat.
The Baird price objective is $425. The consensus price target is lower at $376.59. Twilio stock closed at $341.24 on Tuesday.
Baird seems to have purposely distanced the top picks from the high-profile social media stocks and other meg-cap giants, and with good reason. Many of them are coming under close scrutiny in Washington, D.C., for a variety of reasons. While all these ideas are very aggressive, they should avoid some of the pitfalls that could face other tech giants in 2021. With that noted, in front of upcoming earnings, it may make sense to scale into positions.