Shares of Skyworks Solutions (NASDAQ:SWKS) popped by 11.7% in October, according to data provided by S&P Global Market Intelligence, after JPMorgan released an investor note indicating that the company's revenues will increase because it secured more design wins in Apple's iPhones.
JPMorgan analyst Bill Peterson wrote that Skyworks and its competitors -- Broadcom and Qorvo -- could see double-digit revenue growth over the next year as they benefit from sales of the new iPhones. Peterson said:
We continue to believe the "Big 3" of Broadcom, Skyworks and Qorvo are well-positioned to benefit from dollar content gains in this year's iPhone models and gain further content over the next few years and drive near double-digit revenue growth over the next 12-18 months.
SkyWorks' power amplifiers and radio frequency switches won four spots in the latest iPhone 8 and iPhone 8 Plus. That's a slight improvement over last year, when the company had four spots in the iPhone 7 and three design wins in the iPhone 7 Plus.
Investors were pleased to hear that Skyworks' tech inside the iPhones not only grew this year, but that the company could add more tech inside future iPhones over the next few years as well.
The good news continued into November for Skyworks investors after a recent teardown of the iPhone X by iFixit showed that the company has several power amplifiers in that device as well.
Skyworks reported its fiscal fourth-quarter 2017 earnings at the beginning of November, and the company saw its revenue increase 18% year over year in the quarter, and full-year revenue jumped 11%. Skyworks is forecasting a 15% increase in sales in the fiscal first quarter, which will include sales of its modules and amplifiers into the new iPhones. If that trend continues, and JPMorgan estimates prove correct, then Skyworks investors have even more to look forward to.
Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple and Skyworks Solutions. The Motley Fool has the following options: long January 2020 $150 calls on Apple, short January 2020 $155 calls on Apple, short November 2017 $92 puts on Skyworks Solutions, and short January 2018 $105 calls on Skyworks Solutions. The Motley Fool recommends Broadcom Ltd. The Motley Fool has a disclosure policy.