Qorvo(US:QRVO) The Motley Foolยท2024-08-08 11:15Core Viewpoint - The rise in sales of AI-enabled smartphones is expected to positively impact Qorvo, a chip supplier, as the smartphone market begins to recover from previous declines [1][2]. Group 1: Market Performance - The smartphone market contracted by 11% in 2022 and experienced a further decline of 3.2% in 2023, leading to stagnant share prices for Qorvo over the past couple of years [2]. - Qorvo's fiscal 2025 first-quarter results showed a revenue increase of 36% year over year, reaching $887 million, with non-GAAP earnings rising to $0.87 per share from $0.34 per share [4]. Group 2: Customer Dynamics - Apple is Qorvo's largest customer, contributing 46% of its revenue last year, while Samsung accounted for 12% [5]. - Samsung's Galaxy S24 devices dominated the generative AI smartphone market in Q1 2024, holding over 58% market share, which has positively influenced Qorvo's growth [6]. Group 3: Future Growth Opportunities - Apple's upcoming AI-capable iPhone models are anticipated to boost Qorvo's revenue, as the company is investing in programs to increase its content in Apple's products [8]. - Analysts predict a significant growth in generative AI smartphone shipments, with an expected annual growth rate of 78% through 2028 [7]. Group 4: Financial Projections - Analysts have raised revenue expectations for Qorvo, with estimates for the current fiscal year at $4.666 billion and $4.267 billion for the next fiscal year [10]. - Qorvo is trading at a forward P/E ratio of 16.4, which is lower than the Nasdaq-100 index's forward P/E of 28, suggesting potential for stock price appreciation [11]. Group 5: Investment Potential - If Qorvo achieves earnings of $10.17 per share in the coming years and maintains a P/E of 16.4, its stock price could reach $167, indicating a potential 54% increase from current levels [12].