5 Supplier Stocks to Profit from Apple’s New 5G iPhones

On October 13, Apple Inc. (NASDAQ: AAPL) finally unveiled its long-anticipated new 5G iPhones.

The tech giant launched four new iPhone models, including two cheaper iPhone 12 models at 5.4 inches and 6.1 inches and two iPhone 12 Pro models with 6.1-inch and 6.7-inch screens.

The 5.4-inch phone will be the smallest iPhone since the iPhone SE was released in 2016. The 6.7-inch model is the biggest ever.

Earlier this year during Apple’s third-quarter fiscal 2020 earnings call, the company reported that the new iPhones will be on sale a few weeks later than the usual late-September release due to supply-chain issues caused by the coronavirus pandemic.

Per a recent Bloomberg report, Apple is reportedly preparing its suppliers to mass-produce more than 75 million of the new 5G-enabled iPhones.

This suggests that the demand for iPhones is holding up well despite the ongoing public health crisis. Shipments of its various iPhone 12 models are expected to be as high as 80 million units in 2020.

iPhone sales inched up 1.7% from the year-ago quarter to $26.42 billion. This accounted for 44.3% of total sales in third-quarter fiscal 2020.

I think both of those numbers will grow considerably thanks to these new 5G smartphones.

And the companies that supply Apple will benefit immensely.

Here are the top 5 supplier stocks poised to gain from 5G-enabled iPhone 12 sales…

With more than 1.5 billion active devices in use by customers around the world, Apple has reached its highest install base ever.

Remarkably, even minimal changes in the demand of iPhone-related devices create a stir among Apple’s supplier base.

Investors naturally become more optimistic on Apple suppliers, which depend on the iPhone maker for significant portions of their total revenues.

So, analysts (myself included) are raising price targets on Apple supplier stocks.

Today, I’m looking at Qorvo Inc. (NASDAQ: QRVO), Skyworks Solutions Inc. (NASDAQ: SWKS), Broadcom Inc. (NASDAQ: AVGO), Taiwan Semiconductor Manufacturing Co. (NYSE: TSM), and Synaptics, Inc. (NASDAQ: SYNA).

Qorvo, a provider of radio frequency chips, generated 33% of its fiscal 2020 revenues from Apple.

finviz dynamic chart for  QRVO

This company is benefiting from the increase in production ramp of 5G smartphones.

In fact, it has raised its fiscal second-quarter revenue guidance, citing heightened demand for 4G and 5G mobile products utilized in flagship smartphones.

Solid uptake of bulk acoustic wave filters (used in all iPhones), with the reopening of economies, is expected to boost top-line growth.

Furthermore, Qorvo’s peer in the semiconductor radio-frequency market — Skyworks — is anticipated to benefit from the projected momentum in iPhone sales.

In fiscal 2020, Apple accounted for 51% of Skyworks’ net revenues.

finviz dynamic chart for  SWKS

This company is well poised to gain from the surging demand for 5G handsets.

Its offerings are widely used by Samsung and Motorola, nearest peers of Apple in the 5G supported mobile space.

Also, Skyworks is witnessing strong momentum for its bulk acoustic wave enabled modules in both mobile and broad markets.

Furthermore, Broadcom’s strength in the radio frequency chips positions it well to capitalize on increased iPhone demand.

finviz dynamic chart for  AVGO

Apple contributed nearly 20% of Broadcom’s net revenues in fiscal 2019.

Acceleration in 5G deployment, significant production ramp-up and increase in RF content are favoring this company’s prospects.

On Jan 23, Broadcom inked two separate multi-year agreements with the iPhone maker.

Per the 8K filed with the SEC, the deals are collectively anticipated to generate $15 billion for the chipmaker.

Additionally, Apple utilizes Taiwan Semiconductor’s advanced chips, featuring low power consumption, high performance and compact size, which puts it in this list.

finviz dynamic chart for  TSM

Taiwan Semiconductor — the world's largest dedicated integrated circuit foundry — is well poised to bank on the 5G boom backed by strength in robust 7-nanometer (nm) and 5-nm production processes.

Finally, Synaptics’ top-line performance is likely to benefit from the launch of the new 5G-supported iPhones.

finviz dynamic chart for  SYNA

This company is a display component supplier of Apple.

Synaptics anticipates total revenues for fourth-quarter fiscal 2020 in the range of $260-$290 million thanks to the new 5G iPhone.

Apple’s Urgent 5G Announcement

The next round of 5G millionaires will be created beginning October 21st.

That’s when Apple is set to make an urgent announcement about 5G…

One that could revolutionize everything you thought you knew about this technology.

This is your chance to turn as little as $100 into a fortune.

But you must hurry. 

If you’re not in before Apple’s October 21st announcement, it’ll be too late…

Click here for the full details.