Skyworks Solutions Might Bounce Back in the Second Half of the Year

In the first five months of 2019, the stock of Skyworks Solutions skyrocketed. In the second quarter, however, the firm crashed following its woeful performance. And then, Skyworks gave investors another spark in early June after it slashed its third-quarter outlook.

In addition to that, the company's comeback in June gave investors a surprising hope for the stocks. And the recent pullback in the stock resulted in a solid bet for the next half of the year. Now, the chipmaker is searching for the perfect catalyst that could support its momentum, and investors will get a better look after the firm reports third-quarter earnings on August 7.

In addition to that, Skyworks cuts its third-quarter revenue expectation from its prior range of $815 million to $835 million to a new range of $755 million to $775 million. And it was due to the addition of Huawei to the U.S. government's entity list, making the business with the tech giant difficult.

Also, Huawei provided 12% of the chipmaker's revenue in the first half of the fiscal year, which ends in September. And its addition to the list meant that Skyworks needs to stop shipments to that company. But as the United States and China are trying again to come up with an agreement, Skyworks once again has hope.

Aside from that, President Donald Trump permitted the sales of products to Hauwei as long as it does not affect national security. And in the wake of the about-face of Trump, Skyworks stocks started sailing. However, it is still unknown if the new rules include the products of Skyworks.

Skyworks in the Second Half

Recently, the United States and China came up with a trade truce, and this could help Skyworks have a massive surge in the 5g market. Also, Huawei ended up about half the 5g contracts issued by China Mobile, the country's biggest operator. Meanwhile, the Chinese tech giant is also making waves in the smartphone space by removing Apple from its No. 2 spot in the global rankings from IDC.

Furthermore, Skyworks already expects weakness in the mobile business for this year. For this reason, supplying smartphone chips to Huawei is essential for the firm. And by the second half of the year, smartphone demand should begin rising.

Moreover, 5g networks have rolled out in leading markets like the U.S., the U.K., and more, and compatible devices will surely be next. Qualcomm expects at least 30 5g devices to hit the market in 2019.

As a result, this could mean that users might upgrade the devices they own as 5g network arrives. And it is no surprise if Skyworks upticks its mobile business by the end of 2019. The chipmaker gets two-thirds of its total revenue from its mobile business.

Facebook in Profitable Advertisements

Elsewhere, Facebook is approaching for some of the most profitable advertisements. Recently, the social media company began testing ad placements in search results. And now, it will expand those tests to more marketers.

The strategy of Facebook is making advertising as simple as possible. And this resulted in the growth of its active advertiser base to more than 7 million.



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