Why Qorvo (QRVO) stock is falling today

What happened:

Shares of communications chipmaker Qorvo (NASDAQ: QRVO ) fell 7.3% in the morning session, as stocks of semiconductor companies that design chips used in smartphones fell after Wall Street analysts expressed concern about the delivery time of the iPhone 16 Pro models compared to the previous year. .

Adding to the signs of weak demand, TF Securities analyst Ming-Chi Kuo added that “demand for the new iPhone 16 is lower than expected – and a 12% year-over-year decline from first-weekend sales of the iPhone 15 last year”. Concerns raised by the analyst include intense competition in the Chinese market and the unavailability of Apple Intelligence (a major selling point) during the iPhone 16 launch.

Apple shares fell more than 3 percent on the reports, suggesting potential vulnerabilities in the coming quarters. In particular, weak demand for the iPhone 16 could translate into lower production volumes, which could in turn inform the decision to reduce demand for components like chips, potentially causing a slowdown for semiconductor companies that provides these inputs.

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What the market tells us:

Qorvo shares are quite volatile and have had 6 moves of more than 5% in the past year. Against that background, today’s move indicates that the market sees this news as significant, but not something that would fundamentally change its perception of the business.

The biggest move we’ve written about in the past year was 5 months ago, when the stock fell 15.2% on news that the company reported first-quarter results and provided revenue guidance for the next quarter that missed expectations analysts. In addition, his inventory level has increased.

On the other hand, Qorvo saw a strong improvement in gross margin. Its EPS beat Wall Street estimates. Although the sales outlook was disappointing, it is worth recognizing the return to positive growth during the quarter, attributed to the strength of the high-performance analog segment. Connectivity and sensors have also contributed to the comeback. Overall, this was a mixed but weaker quarter.

Qorvo is down 8.1% year-to-date, and at $100 per share trades 22.6% below its 52-week high of $129.21 dated July 2024. Investors who bought Qorvo stock in worth $1,000 5 years ago would now be looking at an investment worth $1,295.

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