This Semiconductor Stock Has Jumped 48% in 2024, and Artificial Intelligence (AI) Could Help It Soar Further

Core Viewpoint - Cirrus Logic's stock has surged 48% in 2024 due to optimism surrounding a recovery in the smartphone market, strong quarterly results, and potential improvements in its largest customer, Apple [1][3]. Group 1: Financial Performance - Cirrus Logic reported $372 million in revenue for Q4 fiscal 2024, flat year-over-year but exceeding Wall Street's estimate of $317 million [3]. - Non-GAAP earnings rose 35% year-over-year to $1.24 per share, significantly above the consensus estimate of $0.64 per share [3]. - The company forecasts $320 million in revenue for the current quarter, surpassing the analyst estimate of $302 million [3]. Group 2: Customer Dependency - Apple accounted for 87% of Cirrus Logic's revenue in fiscal 2024, up from 83% and 79% in the previous two fiscal years [1][2]. - The decline in Apple's iPhone shipments by nearly 10% year-over-year in Q1 2024 impacted Cirrus Logic's top-line growth [4]. Group 3: Market Outlook - The AI smartphone market is projected to grow at a CAGR of 65% through 2027, which could benefit Cirrus Logic as Apple integrates AI features into its products [4][5]. - Analysts expect Apple to sell 244 million iPhones in fiscal 2025, a 10% increase from the current fiscal year, with continued growth anticipated in fiscal 2026 [5][6]. - The upcoming release of AI-capable MacBooks and the expected upgrade cycle for iPhones could further enhance Cirrus Logic's growth prospects [6][7]. Group 4: Investment Considerations - Cirrus Logic's revenue in fiscal 2024 decreased by almost 6% to $1.79 billion, but analysts predict a small improvement in the current fiscal year [7]. - The stock trades at 26 times trailing earnings, which is a discount compared to the Nasdaq-100's trailing earnings multiple of 32, indicating potential for further upside [7][8].