TLDR
- Skyworks Solutions stock rose 11% to $87.92 on Tuesday, topping the S&P 500, one day after falling more than 10%.
- Apple unveiled the “Duo,” its first foldable iPhone, giving Skyworks a supplier boost as a key RF chip provider.
- CEO Philip Brace said he is “very confident” the $22 billion Qorvo merger will close this calendar year.
- The Qorvo deal has entered final regulatory phases, with approvals pending in only two jurisdictions.
- The combined company is targeting around $500 million in cost and revenue synergies.
Skyworks Solutions stock jumped 11% to $87.92 on Tuesday, making it the best performer in the S&P 500. That came just one day after the stock dropped more than 10%.
Skyworks Solutions, Inc., SWKS
Two things drove the move. First, Apple launched the “Duo,” its first-ever foldable iPhone, at the highest price point in the product line’s history. As a key radio-frequency chip supplier to Apple’s mobile lineup, Skyworks got an immediate boost.
Second, CEO Philip Brace went on record at an investor conference saying the $22 billion merger with Qorvo is in its final regulatory stages, with approvals pending in just two remaining jurisdictions.
Skyworks touched an intraday high of $88.15 on Tuesday, approaching its 52-week high of $92.30. The stock opened at $80.54.
Merger Timeline Comes Into Focus
Brace told attendees at the Goldman Sachs communications and technology conference that the companies are “preparing to close this fiscal year,” which would put the deal closing at the end of September or in early October.
The Qorvo merger is a cash-and-stock deal that brings together two of Apple’s primary iPhone component suppliers. The combined entity would form a $22 billion U.S.-based radio frequency, analog, and mixed-signal semiconductor company.
The prospect of closing within the calendar year shifted investor sentiment. Qorvo stock also rose 7.2% to $115.79 on Tuesday, after falling 7.4% on Monday.
Brace described the deal as “transformative” for both the company and the industry. He also pointed to “super attractive” opportunities in aerospace and defense for the new combined company’s products.
The merger is targeting around $500 million in cost and revenue synergies. Investors have been watching the deal closely, seeing it as a major shift for the analog and mixed-signal semiconductor industry.
Where the Stock Stands
The gains come after a strong stretch for Skyworks. The stock advanced 19% last week and was up 31% in September as of Tuesday.
Despite the recent run, Skyworks remains well below its all-time high. The stock is still down 56% from its record closing high of $199.66 set on April 26, 2021.
Over a longer stretch, the picture is better. Skyworks has risen 39% so far this year and gained 18% over the past 12 months.
Tuesday’s rally stood out because it came against a weak broader market. The S&P 500 fell 0.5%, the Dow dropped 1%, and the Nasdaq slipped 0.6%. Skyworks was a clear outlier.
The stock surged from its open of $80.54 as buyers stepped in throughout the morning session.
Qorvo stock has also gained 13% last week and is up 21% in September, moving closely in line with Skyworks due to the fixed exchange ratio in the merger agreement.
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