Chip stocks haven’t been having a great run of things lately. However, Skyworks Solutions (NASDAQ:SWKS) is increasingly the best of a lagging lot. Skyworks shot up in a big way in Tuesday afternoon trading thanks to a couple different pieces of news that proved positive for the chipmaker.
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The first big piece of news came from Microsoft (NASDAQ:MSFT), which will host an event next week on its role in artificial intelligence development. The companies that offer the best and fastest development cycles will prove winners in the AI arms race. Multiple companies are working in this space, and many of these companies are of the type to be Skyworks clients. That gives Skyworks the perfect opportunity to be part of a “rising tide lifts all boats” affair; the growing push toward artificial intelligence should have a positive effect on chip demand.
That wasn’t all that gave Skyworks a leg up, though. The company’s earnings report proved a mixed bag, but it followed that announcement up with word of a buyback plan supported by $2 billion worth of cash. Analysts offered a note of support as well. John Vinh with KeyBanc Capital Markets left his “overweight” recommendation as-is. He also bumped up the price target from its previous $120 to $130 per share.
Overall, analyst consensus calls Skyworks Solutions a Moderate Buy. With an average price target of $125, SWKS stock enjoys 1.49% upside potential.
