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LinkedIn, Tableau Specter Haunts Apple Chips, Security Stocks

Tech stock declines piled on Monday, snowballing after badly received quarterly reports last week from the likes of  LinkedIn ( LNKD ) and Tableau ( DATA ), whose stocks sheared off.  Apple ( AAPL ) supplier NXP Semiconductors ( NXPI ), GoPro ( GPRO ) supplier Ambarella ( AMBA ) and cybersecurity bigwig Palo Alto Networks ( PANW ) all were down Monday following a brutal last week, among other decliners. IBD’s 26-company Computer Software-Security industry group was collectively down 6.9% in afternoon trading. The 41-company Electronics-Semiconductor Fabless industry group was down 2.7%. Ahead of the closing bell on the stock market today , Palo Alto stock was down 9%. Shares of CyberArk Software ( CYBR ), FireEye ( FEYE ) and Proofpoint ( PFPT ) were down about 9%, 9.5% and 10%, respectively. Shares of NXP and Ambarella were down 9.5% and 6.4%, respectively.  Apple suppliers Avago Technologies ( AVGO ) and Skyworks Solutions ( SWKS ) both fell more than 5% while Cirrus Logic ( CRUS ) and Qorvo ( QRVO ) were each down about 2%. Only a handful of stocks escaped the high-tech sell-off — a continuation of a Friday deluge that saw LinkedIn stock lose nearly half its value on Wall Street after the professional networker announced a low 2016 forecast. Compounding the pressure, analysts see Big Data analytics software maker Tableau losing market share to Amazon.com ( AMZN ) and Microsoft ( MSFT ). Tableau, too, guided to current-quarter sales and earnings that missed the consensus expectation. Security vendors lost 7.4% and fabless chip makers closed down 4% on Friday. NXP Halves Apple Exposure NXP’s plunge looks incongruous after the Apple chip supplier’s Q4 beat last week, but comes on a day when techs are broadly down, and amid an acquisition. In the long run, picking up Freescale is making NXP an automotive powerhouse  — sales in that segment bounded 45% year over year to $422 million. The Freescale deal also halves NXP’s Apple iPhone exposure as the smartphone giant deals with floundering demand. Apple chip suppliers Cirrus Logic, Qorvo, Qualcomm ( QCOM ) and InvenSense ( INVN ) recently issued March-quarter views that lagged the consensus . At least six analysts this month have rated NXP stock a buy, including two on Monday. A Jefferies analyst boosted his price target on NXP stock to 112 from 107. Ambarella stock sank as GoPro stock rocketed 10% as of Monday afternoon on its partnership with Microsoft. GoPro and Microsoft will partner on a patent-licensing agreement for file storage and other system technologies. “This agreement with GoPro shows the incredible breadth of technology sharing enabled through patent transactions,” Microsoft’s technology licensing president, Nick Psyhogeos, said in a press release. Last week, GoPro stock wiped out after missing Wall Street’s Q4 earnings views and guiding well below consensus Q1 expectations. Shares closed down nearly 9% on Feb. 4. But chip maker Ambarella missed the scrum and pulled ahead 5.1% that day. At least seven analysts cut their price targets on GoPro stock following the Q4 report. But at least three reiterated a buy rating, and another boosted his price target. Ambarella tried distancing itself from GoPro during its December quarter, instead highlighting the company’s expansion into drones and home security.

Apple Chipmakers Skyworks, NXP, Avago Plunge On Qorvo Sales Outlook

Qorvo ( QRVO ) drew fellow  Apple ( AAPL ) suppliers Skyworks Solutions ( SWKS ), NXP Semiconductors ( NXPI ), Cirrus Logic ( CRUS ) and Avago Technologies ( AVGO ) into a hole Friday, after the company late Thursday guided current-quarter sales below Wall Street’s consensus by $20 million. IBD’s 41-company Electronic-Semiconductor Manufacturing industry group fell by as much as 3.7% Friday and was down more than 2% in afternoon trading on the stock market today . Qorvo was down nearly 4%. Avago and Cirrus Logic stocks were down 5.5% and 4%, respectively. Shares of Skyworks and NXP were both down about 6% Friday afternoon. Apple stock was down nearly 2.5%. For its fiscal Q3 ended Jan. 2, Qorvo reported $620.7 million in sales and $1.03 earnings per share ex items, down 16% and 20%, respectively, vs. the year-earlier quarter. Both measures topped the consensus of 21 analysts polled by Thomson Reuters for $620.34 million and 94 cents. Qorvo also topped its Jan. 7 sales pre-announcement of $620 million, but missed its earlier, unchanged guide for $1.25-$1.30 EPS ex items. For the current quarter, Qorvo guided to $600 million in sales minus items and 90-95 cents EPS ex items. The consensus saw $620.1 million and 92 cents. At least four analysts cut their price targets Friday on Qorvo stock. Citigroup downgraded shares. DA Davidson analyst Thomas Diffely blamed Apple iPhone weakness as a “key contributor” to Qorvo’s 15% sequential decline in mobile sales. During Q3, Apple sales comprised 42% of Qorvo’s total revenue, he estimated in a research report. The March quarter will largely depend on Samsung’s Galaxy S7 ramp-up, MKM analyst Ian Ing wrote in a report. Qorvo is approaching the quarter cautiously. “We perceived an abundance of caution and potential volatility to both the current quarter as well as the calendar year,” he wrote. “That said, Qorvo feels ‘very good’ on designs for marquee phones with a September quarter, December quarter ramp.” Qorvo expects dollar-content growth in “the most highly-anticipated marquee smartphones this year at our three largest mobile customers,” CEO Robert Bruggeworth told investors on the company’s earnings conference call late Thursday. Infrastructure/defense sales grew sequentially, analyst Diffely noted. “We expect growth (in infrastructure and defense products) to continue for several more quarters buoyed by a combination of stable markets and a number of new product introductions,” he wrote. Ing and Diffely slashed their price targets on Qorvo stock to 65 from 66, and to 65 from 70, respectively. Both rate Qorvo stock a buy.

Apple Suppliers NXP, Qorvo Fall On iPhone 6S Weakness

Apple ‘s ( AAPL ) iPhone 6S tornado hit shares of chipmakers  NXP Semiconductors ( NXPI ) and Qorvo ( QRVO ), a Goldman Sachs analyst wrote Wednesday ahead of the duo’s quarterly earnings reports. Both are expected to report 16% dips in December-quarter sales and earnings that fell by double digits during the holiday season. “Smartphone-exposed stocks have been under pressure recently after a slew of negative pre-announcements among suppliers with heavy Apple exposure,” Toshiya Hari of Goldman Sachs wrote in a research report. But Hari sees the potential for a “snap-back” as “investors digest Apple’s weak Q1 and begin to look at what we believe will be a relatively strong 2016 overall.” NXP Semiconductors fell 2.9% on the stock market today  ahead of its late Wednesday Q4 earnings report. Qorvo stock closed down 0.2% and is scheduled to report fiscal Q3 earnings late Thursday. Apple for its part, rose 2% on Wednesday. For its December quarter, NXP is expected to report $1.29 billion in sales and $1.07 earnings per share ex items, down 16% and 21%, respectively, vs. the year-earlier quarter. The consensus view of 25 analysts polled by Thomson Reuters was relatively in line with NXP’s three-months-ago guidance for a sales decline of “low to mid-teens,” sequentially. For the year, analysts model $5.78 billion in sales and $5.43 EPS minus items, up 2% and 14%, respectively, vs. 2014. Hari rates NXP stock a neutral as it continues realizing synergies from its recently completed acquisition of Freescale Semiconductor. The merger reduced NXP’s Apple exposure by essentially half, Hari noted. He expects NXP to mount up on its automotive content, expected to grow by 9% CAGR over the next three years. Advanced driver assistance systems, infotainment and autonomous vehicles will drive that growth. Late Thursday, Qorvo is expected to report $620.3 million in sales and 94 cents EPS ex items for its fiscal Q3. On a year-over-year basis, sales would dip 16% and EPS would be down 37%. Qorvo, Cirrus Logic ( CRUS ) and Dialog Semiconductor drove smartphone pressure with their negative pre-announcements late last year. Qorvo reduced its fiscal Q3 sales guide to $620 million from earlier views for $720 million to $730 million. The company didn’t reduce its EPS ex items guide for $1.25 to $1.30. Hari downgraded Qorvo stock to neutral from a buy rating on its “disadvantage to Skyworks Solutions ( SWKS ) … given (Qorvo’s) ongoing integration and Skyworks’ ability to leverage its portfolio of adjacent analog products to provide more complete solutions to handset (smartphone-makers).” Qorvo was created in January 2015 with the merger of RFMD and TriQuint, and competes against radio-frequency (RF) chip suppliers Skyworks and Avago Technologies ( AVGO ). RF content in smartphones is expected to grow 9% and 14% in 2016 and 2017, Hari estimated. That’s against an 0.4% decline in smartphone unit growth in 2016 vs. 1.4% growth in 2015, he wrote. Although Qorvo’s portfolio is more complete post-merger, Hari questioned the timeline on synergies. The company guided to $150 million in synergies in 2017 with $75 million realized in 2015.