What exactly is “button trouble,” you might wonder. And what does it have to do with tech stock Cirrus Logic? (NASDAQ:CRUS) Better yet, why did it send Cirrus plunging almost 13% in Wednesday afternoon trading? The answer has to do with the company’s connection to Apple (NASDAQ:AAPL) and Apple’s line of still-highly-popular mobile devices.
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The button trouble in question comes from a possible change in Apple’s mobile device design. Word from TF International Securities analyst Ming-Chi Kuo notes that Apple may have plans to ditch the solid-state button on its upper-tier devices. Specifically, the iPhone 15 Pro and the iPhone 15 Pro Max. Certain “unresolved technical issues” are involved here, and the removal of the solid-state buttons may be on tap. Kuo notes that a return to physical buttons may be in line, and if that happens, Cirrus Logic could be hit accordingly.
Cirrus Logic is the exclusive supplier of Controller IC parts for the solid-state buttons, Kuo notes, so if Apple drops that business, it’s bad news for Cirrus. That’s particularly troubling considering what Daniel Ives of Wedbush Securities recently noted about the iPhone lineup. Ives noted that iPhone demand is on the rise, showing a clear upward path in the second quarter.
For right now, though, the news is still good for Cirrus Logic stock. Analyst consensus unanimously declares it a Strong Buy with eight Buy recommendations. Plus, CRUS stock comes with 25.02% upside potential thanks to its average price target of $111.
