What Happened?
Shares of communications chips maker Qorvo (NASDAQ: QRVO) jumped 5% in the morning session after the company announced a collaboration with SIAE MICROELETTRONICA to develop an advanced Ka-Band phased antenna array for satellite communications.
The partnership was part of a major European program named "Sustainable Technologies Enabling Future Telecom Applications (SHIFT)," which aimed to speed up innovation in telecom systems. Under the agreement, Qorvo supplied its high-performance Beamformer Integrated Circuit (BFIC) technology, a key component for creating compact, efficient, and steerable antenna systems. This collaboration was seen as a significant step, as it integrated Qorvo's proven technology into the European Union's supply chain. Executives noted the deal streamlined the path from research to a system demonstration, cutting risk and accelerating development to support Europe's strategic goals for space and secure communications.
After the initial pop the shares cooled down to $95.86, up 4.4% from previous close.
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What Is The Market Telling Us
Qorvo’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 11 months ago when the stock dropped 27.7% on the news that the company reported weak third-quarter earnings, with its revenue and EPS guidance for next quarter missing analysts' expectations. The company provided weak full-year revenue and gross margin guidance due to an unfavorable shift in smartphone demand as more consumers opt for lower-priced 5G smartphones rather than mid-range options. Notably, cheaper smartphones tend to fetch lower profit margins compared to mid-tier and flagship models. Even worse, Qorvo doesn't expect the trend to reverse, at least in the near term. On the other hand, Qorvo recorded a big improvement in inventory levels, and its revenue outperformed Wall Street's estimates. Overall, this was a weaker quarter for the company.
Qorvo is up 37.4% since the beginning of the year, and at $95.86 per share, it is trading close to its 52-week high of $104.96 from September 2024. Investors who bought $1,000 worth of Qorvo’s shares 5 years ago would now be looking at an investment worth $730.60.
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