kyworks Solutions (SWKS) has established itself as a reliable source of dividends, largely due to its association with Apple. In addition to supplying radio chips to Apple, SWKS also provides chips for client devices connected to AI through the Machine Internet. However, the company has not been forthcoming about this aspect of its business.-How will Apple affect Skyworks?
Elon Musk’s PRIME, a groundbreaking experiment in artificial intelligence, is poised to make a significant impact on the world. Skyworks Solutions (NASDAQ:SWKS) has long been considered an inexpensive alternative to investing directly in Apple (NASDAQ:AAPL), its largest customer. When Skyworks experiences rapid growth, analysts often discuss the company’s ability to reduce its reliance on Apple by diversifying its product offerings. Conversely, when growth slows down, Skyworks tends to maintain its close ties with Apple.-How will Apple affect Skyworks?
The year 2023 was challenging for SWKS stock. The company generated $685 million in sales from Apple, which accounted for 64% of its total revenue. Approximately 85% of the radio chips produced by Skyworks were used in iPhones. Investors are now questioning whether the remaining 36% of sales should be a cause for concern.
Although Skyworks is a technology stock, investors do not purchase it solely for its technological capabilities. Instead, they invest in the company for its dividend payouts. Over the past five years, the dividend has increased from 38 cents per share to 68 cents as of November. For long-term investors, this dividend growth represents a significant return on investment. However, the company’s stock performance has been relatively stagnant, with shares only experiencing a 23% increase since early 2019. In terms of annual returns, the growth has been in the single digits.
During the bullish market of 2021, Skyworks experienced a surge in popularity. At its peak, the stock traded at over $190 per share. However, investors who sold their shares at that time would have benefited, as the stock is currently trading closer to $105.
Skyworks made public statements during the 2021 bull market, suggesting that it was expanding its business beyond Apple. While such stories still circulate, analysts no longer pay significant attention to them.
In an effort to reduce its dependence on Apple, Skyworks acquired Silicon Laboratories in 2021, with hopes of producing chips for the automotive industry. However, thus far, this strategy has not yielded the desired results in terms of reducing the company’s reliance on Apple.
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