1 Stock to Buy Now Even Though Smartphone Sales Are Getting Hammered
The tech sector could be in for a rough 2023, and the hardware space in particular is headed in the wrong direction. Tech researcher Gartner recently revised its outlook for 2023 global IT spending downward. It now anticipates growth of just 2.4%, compared to the 5.1% growth it forecast previously. Device sales account for much of this tempered optimism. After declining by an estimated 10.6% in 2022, Gartner expects tech hardware sales to fall another 5% in 2023.
Smartphones are one of these device types for which sales have been sinking like a stone. This has been bad news for connectivity chipmaker Skyworks Solutions (NASDAQ: SWKS). Its shares have tumbled by 22% since the start of 2022. And while it looks like there will be another couple of bleak quarters ahead for the smartphone market, Skyworks stock could still be a buy right now.
Let's start by considering some developments that might be making people a bit nervous about Skyworks as an investment. For years, Apple has been its largest customer. Despite Skyworks' multiple efforts to diversify its customer base -- including the sizable acquisition of Silicon Labs' infrastructure and automotive segment back in 2021 -- Apple still holds sway over the company. In its fiscal 2023 first quarter, which ended Dec. 30, Skyworks said its top customer (Apple) accounted for a whopping 68% of total revenue, up from 63% the prior quarter.
Source Fool.com
