By Mackenzie Tatananni
On a banner day for semiconductor stocks, Skyworks Solutions was on pace for its worst session in more than a year.
The PHLX Semiconductor Index, a sector benchmark also referred to as the Philadelphia Semiconductor Index, recorded its largest 25-day rally since the 2000 dot-com bubble through Tuesday's close.
The gains have investors drawing comparisons to the historic semiconductor run of 2020 and 2021, when the index massively outperformed the broader S&P 500. The VanEck Semiconductor exchange-traded fund, up more than 210% from its April 2025 lows, is also revisiting the patterns of that time.
One stock was missing out from the rally: Skyworks fell 11% to $64.46 on Wednesday, heading for its largest single-day decline since a 12% drop in April 2025. Shares fell as much as 15% earlier in the session, marking the most severe slump since February of last year.
At first glance, it's difficult to see why. Fiscal second-quarter earnings, posted after the closing bell Tuesday handily beat analysts' forecasts. The results were coupled with better-than-expected guidance for the current quarter and positive commentary from management, as the company asserted it was largely unaffected by memory shortages and pricing.
But there may be more concerns than management is letting on. Benchmark analyst Cody Acree says that much of the market's concern is tied to demand durability.
Skyworks designs and manufactures the analog and mixed-signal semiconductors that allow devices to connect to wireless networks, manage power, and process signals. The company counts Apple among its largest customers.
However, higher memory prices and supply constraints continue to pressure original equipment manufacturers like Samsung, another major client. If these companies can't afford to build cheap phones because memory chips are too expensive, Skyworks loses the volume of chips it would have sold for those phones.
Moreover, "investors are still reluctant to pay up for a company whose earnings base remains heavily tied to the mature smartphone market," Acree says. Mobile revenue, 58% of the business, fell 15% from the previous quarter and 7% from the prior year.
The struggles identified here are nothing new. Skyworks stock plunged more than 28% in 2025 against a 20% gain for the tech-heavy Nasdaq 100, fueled by concerns over the smartphone and cellular focus of its business.
Acree himself remains sidelined on the stock as he waits for Skyworks to reverse its multi-year revenue slide, hoping the company can "provide clearer evidence that it can return to sustainable predictable growth." In the latest quarter, total revenue declined 1% from same period last year.
Acree isn't the only analyst with concerns. UBS' Timothy Arcuri explicitly cited "consumption headwinds" in the smartphone market, saying it was enough to keep him on the fence for now.
Oppenheimer analyst Rick Schafer also fell short of endorsing of the stock. Schafer noted that 58% of Skyworks' business is tied to handsets, a market regarded as mature and ex-growth.
Although Skyworks is attempting to grow its Broad Markets division -- encompassing data center, auto, and WiFi -- to offset mobile stagnation, Schafer has dubbed this effort a "prove it" initiative.
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com
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(END) Dow Jones Newswires
May 06, 2026 14:36 ET (18:36 GMT)
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