Nvidia still tops at Citi but Qorvo, Skyworks get rating cuts on China smartphone substitution risk
P_Wei
Citi has maintained Buy ratings on Nvidia (NASDAQ:NVDA) and Marvell Technology (NASDAQ:MRVL), while downgrading Qorvo (NASDAQ:QRVO) and Skyworks Solutions (NASDAQ:SWKS) to Sell on China smartphone substitution risk.
Citi updated its specialty semis coverage ratings/rankings and maintained Nvidia (NVDA) as No. 1 as investor focus moves to AI demand signals through the end of the year before B100 GPU launch in H1'24 as probably the next major stock catalyst.
The analysts said that they like Marvell's (MRVL) 800G optical AI opportunity but believe that Street's C24 enterprise networking plus carrier infrastructure estimates need to come down another ~10%.
Meanwhile, the analysts downgrade smartphone exposed Qorvo (QRVO) and Skyworks (SWKS) to Sell from Neutral on increased China substitution risk following Huawei Mate 60 phone launch which they think uses domestic radio frequency (RF)/connectivity chips.
At the end of August, Huawei surprised many by quietly launching its new flagship phone, Mate 60 Pro. The Chinese company did not provide details on the chip inside but people speculated that it could be using a 5G capable chip. The chip, reportedly, is made by Semiconductor Manufacturing International (OTCQX:SIUIF).
In addition, the analysts said that, while Qorvo/Skyworks' China sales have already come down over the past one plus year due to weak China smartphone demand or ~21%/~11% of last reported financial year, they think growing competition from Chinese local RF component makers will lead to potential at Oppo, Vivo and Xiaomi (OTCPK:XIACF) (OTCPK:XIACY) and weak sales recovery 2024.
Qorvo has a Buy rating at Seeking Alpha's Quant Rating system, which consistently beats the market. Meanwhile, the Seeking Alpha authors' average rating is Hold and so is the average Wall Street analysts' rating.

More on Nvidia, Marvell, Qorvo and Skyworks

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