Here's the Latest Supporting Data for Marvell, Apple and Qualcomm
Apple's iPhone outlook for the current quarter looks overly conservative compared to guidance from several competitors.
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* Coherent's outlook adds support for our Marvell shares
* NXP's mobile outlook, another supportive data point for Apple and Qualcomm
With the pace of quarterly earnings still running high and no portfolio companies reporting today, we are mining earnings press releases and conference calls for those that are reporting for insights about our holdings and those in the Bullpen.
Coherent's Outlook Adds Support for Our Marvell Shares
Coherent COHR , a company whose businesses span networking, industrial lasers, and materials, reported December quarter results that topped expectations and lifted its EPS outlook for this year to $1.30-$1.70, compared to the $1.33 consensus and its prior guidance of $1.00-$1.50.
Examining the shareholder letter Coherent published as part of those quarterly results the following stood out to us:
"We have increased the lower end of our fiscal 2024 revenue guidance. We are now guiding for $4.55-$4.7 billion versus our previous guidance of $4.5-4.7 billion.
Underlying our revised outlook, the second quarter reinforced our confidence in the outlook for our Datacom vertical (which is within our Communications market) driven by AI-related datacenter builds by Webscale, other Cloud Internet Content Providers, and companies that supply them.
We also are encouraged by signs of improving end demand (including sequential revenue and/or order improvement) in a number of our key end markets including, most prominently, in our Industrial market and in our Telecom vertical (which is within our Communications market)."
Those comments along with increasing capital spending on data center, cloud, and AI by Amazon AMZN , Alphabet GOOGL , Meta META , and Microsoft MSFT are positive for our Action Alerts PLUS position in Marvell MRVL . While the portfolio has a full position in MRVL shares at roughly 3.9% of the portfolio, the shares have support at the 50-day moving average ($61.33), which would be a good place for newer members to add some shares.
NXP's Mobile Outlook Looks Bright
When we added to our holdings in Qualcomm QCOM yesterday, we shared Foxconn's January revenue report and what it said about smartphone seasonality was a factor in our thinking. That report added another layer of confirmation that Apple's AAPL iPhone outlook for the current quarter -- flat with March 2023, which suggests being down 25% year over year -- looked overly conservative compared to guidance from RF companies Qualcomm, Skyworks SWKS and Qorvo QRVO . To that, we can add the current quarter outlook issued by NXP Semiconductor NXPI on its earnings call this morning:
"Mobile is expected to be up in the low 30% range year-on-year and down in the mid-teens percent range versus quarter 4 2023."
That comment also adds support for our decision to add to QCOM shares yesterday.
Action Alerts PLUS is long AMZN, GOOGL, MSFT, MRVL, QCOM, AAPL.