Forget Smartphones. IoT Could Be the Next Big Catalyst for These 2 Tech Stocks
Smartphones are no longer a hotbed of growth for chipmakers. The lack of cutting-edge innovation and the overall saturation of the market after years of terrific growth have weighed on the market’s growth over the past couple of years.
Smartphone sales increased just 1.3% during the first quarter of 2018, according to Gartner. The situation isn’t likely to improve anytime soon. Semiconductor industry bellwether Applied Materials recently said that smartphone chip suppliers are pulling back their capacity investments due to tepid demand.
This is bad news for (( Qorvo NASDAQ:QRVO) and Skyworks Solutions NASDAQ:SWKS), as they get a big chunk of their revenue by supplying chips for smartphones. But the good thing is that they have decided to switch gears just in time to hop on to another big opportunity — the Internet of Things (IoT) — which could help them make up for the smartphone slowdown.
Mobile products make up for three-fourths of Qorvo’s top line at present; the smartphone weakness means that it has hit a rough patch in recent quarters.