Bank of America has identified a group of consumer-facing semiconductor stocks it considers better placed to manage a prolonged downturn in smartphone demand that the bank says could continue into 2027 unless memory prices find stability. The research focuses on how individual firms balance exposure to mobile devices with diversification into automotive, Internet of Things (IoT) and emerging AI-related opportunities.
The analysis singles out two names in particular, detailing price targets, valuation assumptions and the key operational and market risks that could shape performance over the coming years.
Qualcomm
Bank of America assigns Qualcomm a price objective of $145, derived from a multiple of 13 times the company’s estimated non-GAAP earnings per share for 2027 of $11.55, a figure that excludes stock-based compensation. The bank applies a discount to Qualcomm relative to diversified and analog peers, citing a muted growth outlook and limited exposure to data center infrastructure buildout.
The firm highlights specific downside risks that could pressure Qualcomm’s outlook: a modem revenue roll-off from its largest customer amounting to an estimated $7-8 billion by fall 2027; potential loss of share at a major Android customer; customer insourcing initiatives; licensing renewal uncertainty in the first half of 2027; concentrated exposure to China; and heightened competition within the crowded AI data center market.
Bank of America also outlines upside scenarios. These include continued diversification into automotive and IoT markets toward a fiscal 2029 target of $22 billion, traction for AI inference accelerators, momentum from Nuvia ARM CPUs, a shift to a more premium product mix and increasing on-device AI content. Recent analyst activity noted in the bank’s write-up includes upgrades from Bernstein and Tigress Financial Partners, which highlighted growth opportunities tied to AI-enabled smartphones, automotive applications and IoT. Tigress additionally called attention to Qualcomm’s newly announced $20 billion share buyback program.
Skyworks Solutions
For Skyworks, Bank of America sets a $60 price objective based on an 11-times multiple of the company’s estimated 2027 earnings, excluding stock compensation expense. That valuation lies within Skyworks’s historical trading range of 8-22 times and reflects a balance between potential sector re-rating and AI-driven smartphone tailwinds on one hand, and merger overhang and content loss related to iPhone 17 on the other.
The bank lists upside catalysts for Skyworks such as market share gains, sustained acceleration from 5G adoption, semiconductor industry consolidation producing attractive merger and acquisition opportunities, and successful execution on the proposed merger with Qorvo. On the flip side, Skyworks faces concentration risk, since Apple represents roughly 70% of the company’s sales; a sharper-than-expected year-over-year decline in smartphone unit volumes; and the risk of faster-than-anticipated average selling price degradation in an environment of muted pricing power.
Bank of America’s notes reference Skyworks’s recent second-quarter fiscal 2026 results, which surpassed analyst forecasts with revenue of $944 million and earnings per share of $1.15. The company has also filed updated financial statements with the SEC related to its planned acquisition of Qorvo.
The bank’s assessment portrays a consumer chip sector under pressure from weak phone sales but identifies specific firms that may be better equipped to manage through the cycle by leaning into non-phone end markets and new technology segments. The guidance and risk items presented reflect the firm-level particulars that will determine relative outcomes as the sector navigates uncertain demand and pricing conditions.