Two Chip Stocks: One Soared, One Tanked. Here’s Why.

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Shares of KLA and Skyworks Solutions went successful antithetic directions.

Dreamstime

A institution that makes chips, and 1 that makes the machines that marque the chips person fared precise otherwise since they reported their earnings.

Shares of KLA (ticker: KLA) soared 9% aft the semiconductor instrumentality shaper reported it has sold retired of its products—for the remainder of the year—and issued a bullish forecast done December.

But shares of spot shaper Skyworks Solutions (SWKS), an Apple supplier, plunging 6% aft its net hardly topped forecasts. And expectations are precocious because of the semiconductor shortage.

By comparison, the benchmark PHLX Semiconductor index, oregon Sox, was up 0.3% successful day trading Friday.

KLA reported a fiscal fourth-quarter nett of $684 million, oregon $4.43, connected an adjusted basis, connected gross of $1.93 billion. Analysts had modeled adjusted nett of $3.99 a stock connected gross of $1.87 billion.

But it was KLA’s forecast that propelled shares upward. The institution projected that spending connected silicon wafer equipment—some is utilized to find defects during the fabrication process—would emergence to implicit $80 billion; its anterior estimation was $75 billion. And executives said KLA it had sold retired of its semiconductor instrumentality for the year.

Credit Suisse expert John Pitzer wrote that KLA’s backlog for this calendar twelvemonth suggests the archetypal fractional of 2022 is going to beryllium conscionable arsenic strong—a affirmative motion for things to come. Pitzer besides noted that the broad-based request for memory-related products would payment the company. Pitzer reiterated his Outperform standing and $380 people price.

Skyworks Solutions, connected the different hand, reported a fiscal third-quarter nett of $358.6 million, oregon $2.15 a stock connected an adjusted basis, and gross of $1.1 billion. The results conscionable topped statement estimates. The company’s guidance was besides astir successful enactment with expectations.

Raymond James expert Chris Caso wasn’t deterred, and reiterated his Outperform standing and $220 people price. Case called the results and guidance “solid” and wrote that the outlook for the remainder of the fiscal twelvemonth didn’t incorporate immoderate surprises.

Baird expert Tristan Gerra has an Outperform standing and a $220 people terms arsenic well. He pointed to the company’s acquisition of Silicon Labs, which closed Monday, arsenic a mode of boosting the company’s yearly per-share net and revenue. Gerra estimated the woody would adhd 60 cents a stock to nett and astir $400 cardinal successful yearly gross tally rate. He noted the cross-selling opportunities, should thrust maturation for Silicon Labs going forward.

Write to Max A. Cherney astatine max.cherney@barrons.com

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