Stephens' Harsh Kumar On Semiconductor Weakness: It's A 'Tremendous' Opportunity, Apple Fears Overblown
Harsh Kumar, Managing Director and Semiconductor analyst at Stephens & Co discussed with Benzinga why the Semiconductor space is showing weakness.
Kumar stated that the sector's weakness represents a "tremendous buying opportunity" and advising investors to take advantage of the weakness with the Market Vectors Semiconductor ETF (NYSE: SMH) trading lower by more than 3 percent Wednesday afternoon.
Case In Point: Skyworks Solutions
Skyworks Solutions Inc (NASDAQ: SWKS) is a key component supplier to Apple Inc. (NASDAQ: AAPL) iPhone 6 and iPhone 6 Plus devices Investors appear to be under the assumption that Skyworks' numbers will be hit after some of Apple's iPhone data points and commentary was not well received by investors.
As pointed out by Citi analyst Jim Suva, iPhone unit sales of 47.53 million were up 35 percent from a year ago and above the Street's expectations of 47 million. However, the figure actually fell short of the whisper number of above 50 million units.
Skyworks and Apple do not publicly discuss their relationship. However, Kumar maintained a positive tone ahead of its third quarter results set to be released after Thursday's market close. With shares trading lower by 6 percent, the analyst offered a contrarian view and stated that the company's print will "help clear the air" regarding the health of the sector.
Other Apple suppliers also saw their shares trading lower. Shares of Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE: TSM) were lower by more than 3 percent. Smaller Apple suppliers (in terms of market cap) such as Jabil Circuit, Inc. (NYSE: JBL) and Fairchild Semiconductor Intl Inc (NASDAQ: FCS) also saw declines on Wednesday with shares lower by 1.70 percent and 1.50 percent, respectively.
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