What Happened?
Shares of wireless chips maker Skyworks Solutions (NASDAQ: SWKS) fell 3.2% in the afternoon session after a weak forecast from industry peer Texas Instruments sparked concerns about a slowdown in the semiconductor sector. Texas Instruments, one of the largest makers of analog chips, provided a lackluster forecast for the fourth quarter, with revenue and profit projections falling short of analyst estimates. This news raised concerns that the recovery in the semiconductor industry was sputtering. The negative sentiment was felt across the sector, with the Philadelphia Semiconductor Index having declined in the previous session.
The shares closed the day at $73.96, down 3.2% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Skyworks Solutions? Access our full analysis report here.
What Is The Market Telling Us
Skyworks Solutions’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 9 days ago when the stock gained 4.8% on the news that investor fears eased as President Trump softened his tone regarding trade relations with China. Following a sharp selloff late last week fueled by threats of an additional 100% tariff on Chinese goods, the president's more conciliatory weekend message that "it will all be fine" sparked a broad market rally. The semiconductor sector, which is particularly sensitive to international trade policies due to its global supply chains, was among the biggest beneficiaries of the improved sentiment. Chipmakers had posted significant declines during the previous week amid escalating tariff concerns. The reversal in tone helped these stocks recover a substantial portion of their recent losses as investors bought back into the sector, relieved that trade tensions might not escalate further.
Skyworks Solutions is down 16.4% since the beginning of the year, and at $73.97 per share, it is trading 24.5% below its 52-week high of $98.03 from October 2024. Investors who bought $1,000 worth of Skyworks Solutions’s shares 5 years ago would now be looking at an investment worth $493.99.
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