Yahoo Finance MarketPulse: Chip Stocks Crumble Under Apple Pressure
Investing.com - Apple shares fell sharply Monday, triggering a rout in the broader tech sector, after one of its suppliers cut its outlook, fuelling speculation of waning demand for Apple's latest iPhones.
Apple (NASDAQ:AAPL) fell 4% after Lumentum Holdings (NASDAQ:LITE), one of its facial recognition suppliers, slashed its guidance, citing a large laser diodes customer for 3D sensing – widely believed to be Apple – had requested to materially reduce previously placed orders scheduled for delivery in the fiscal second quarter.
The warning from Lumentum sent shockwaves through Apple supply chain stocks, including a number of semiconductor companies like Skyworks Solutions, which manufactures radio frequency chips used in iPhones.
Skyworks Solutions (NASDAQ:SWKS) was handed a further drubbing following Citigroup 's (NYSE:C) bleak outlook on the company and investment rating downgrade from neutral to buy on worries about broad smartphone weakness observed in China and disappointing iPhone XR unit sales. Its shares fell 4%.
Citigroup cut its price target on Skyworks to $85 from $116.
Among other Apple suppliers, Qorvo (NASDAQ:QRVO) fell 6%, exacerbating the selloff in chip stocks and was on track to record a second-straight session of losses. The stock is down about 14% since topping second-quarter estimates on Oct. 31.
For the December quarter, Qorvo guidance revenue in the range of $880 million to $900 million and adjusted earnings per share of $1.95 at midpoint.
The Philadelphia Semiconductor Indexfell more than 3%.
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