• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Technology

Cramer: Skyworks Can Resume Its Climb

The company provided you with a roadmap for further blowouts.
By JIM CRAMER
Jan 20, 2017 | 07:18 AM EST
Stocks quotes in this article: SWKS, AAPL, TXN, NXPI, QCOM, CRUS, QRVO, AVGO, FB, NFLX, AMZN, GOOGL

You don't just want a blowout; you want a roadmap to further blowouts, and that's exactly what Skyworks Solutions (SWKS) gave you last night.

If you don't know Skyworks, it's one of a group of semiconductor companies that got pigeon-holed as helpless, but grateful Apple (AAPL) suppliers like Avago, Texas Instruments (TXN) , NXP Semiconductors (NXPI) , Qualcomm (QCOM) , Cirrus Logic (CRUS) and Qorvo (QRVO) .

Now, Texas Instruments was always the paradigm here -- a company that had a substantial Apple business, but never enough for it to be a be all and end all. I always felt that should be the goal of all of these companies; just make Apple -- a component of the Action Alerts PLUS charity portfolio -- part of the pastiche for heaven's sake, not the pastiche.

Then, Avago, when it acquired Broadcom (AVGO) and changed its name to the latter, grew out of the Apple slavery trade. Qualcomm, of late on fire for using alleged monopoly power to make Apple bend to its wishes, decided to buy NXP to get more into the integrated car.

That spread between the $110 that you are supposed to get with Qualcomm's offer and where it is now is a bit disconcerting. But the diversification will work. Cirrus has so much of Apple's business that I don't even know what it can do other than ride the tiger. Qorvo's trying, but it still needs more diversification.

And then there's Skyworks, which has been the most aggressive at winning more and more Apple business and has therefore become a pure derivative of Apple.

Until this quarter. There's enough non-Apple business, enough business involving mobile connectivity away from Apple, and enough of a roadmap of the future toward 5G, which will be so much faster than what we have now, that you can see why the stock's soaring.

Rather than saying how much a "large customer" might need from Skyworks -- because you aren't supposed to mention Apple's name on any call or risk losing the business -- Skyworks talked about how all devices need its chips if they want to run Facebook (FB) , Netflix (NFLX) , Uber, YouTube, Spotify and Waze.

Basically, as CEO Liam Griffin pointed out in what was a pretty electric conference call, if you want "ultrafast, low latency, highly secure and efficient connections as well as location based services," you need Skyworks chips in that device, whether it be a cellphone, the connected home with a service you talk to (think Amazon (AMZN) and Google (GOOGL) machines), Wifi anywhere, or a connected car.

And it's only going to get better as we await 5g, which will allow you to download a full length movie in seconds as opposed to the current iteration, 4g, which can download a movie in minutes and 3G, which took a day.

Yep; this quarter was all about what the company called "growth and success outside our largest customer", which is music to the analysts' ears, especially when the company told you inventories were lean and it's happy with the current state of both the connected and the mobile world demand.

Now, they haven't lost any Apple, and it's still 40% of their business, but when you hear the streak of names away from Apple, including the clear number two, Huawei, you just get a level of comfort that allows you to pay more for the $6.20 you might be looking for in 2017.

How much? Certainly more than the 12 PE the stock has now. Which is why Skyworks can resume the climb it had before the street feared too much Apple hostage taking. Perhaps even the run back to the $100s, from the $70s, where it was just two years ago.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long AAPL, NXPI, FB, GOOGL.

TAGS: Investing | U.S. Equity | Technology | Earnings | Markets | How-to | Jim Cramer | Risk Management | Stocks

More from Technology

Cybersecurity Stocks that Lagged in 2020 Could Get Boost from SolarWinds Hack

Eric Jhonsa
Jan 16, 2021 8:00 AM EST

The hack stands to drive an uptick in corporate and government spending to protect both on-premise and cloud assets.

I Find Draganfly's Connection to American Airlines Intriguing

Timothy Collins
Jan 15, 2021 12:29 PM EST

Drones are set to become a bigger and bigger part of the commercial world and our day-to-day lives.

Twitter Shares Are Just Plain Overvalued

Jim Collins
Jan 15, 2021 11:45 AM EST

Here's where Jack Dorsey's ship will start to sink.

World's Third-Largest Smartphone Maker Added to U.S. Military Blacklist

Alex Frew McMillan
Jan 15, 2021 8:30 AM EST

Xiaomi shares plunged in Hong Kong trade Friday after the Department of Defense said the mobile-phone maker is part of China's 'military-civil fusion'.

TSMC's Big 2021 Capex Budget Might Have Something to Do With Intel

Eric Jhonsa
Jan 14, 2021 3:29 PM EST

While expected demand from clients such as Apple and AMD is also probably motivating TSMC to invest more, the size of its 2021 capex budget suggests other factors are also at play.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:01 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    When it's time to sell, will you act or freeze?
  • 08:35 AM EST GARY BERMAN

    Wednesday Morning Fibocall for 1/13/2021

    Lower highs... SPX (Long-Term View) The 1/8/2...
  • 08:07 AM EST GARY BERMAN

    Tuesday Morning Fibocall for 1/12/2021

    Watch if the recent trend of lower highs continues...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login