On Monday, analysts came out with notes pointing to highly encouraging smartphone build trends, especially those for 5G phones. Goldman Sachs analysts said they're now expecting 120 million 5G smartphone builds for 2020, up from a prior forecast of 50 million, as manufacturing bottlenecks for 5G smartphone equipment are clearing up. Meanwhile, JPMorgan published a note saying they see "solid" demand for 5G iPhones, which could hit 44 million in shipment volumes for the fourth quarter of 2019 and 63 million in the quarter after. And Cowen analysts wrote that they're increasing their build estimates to 47 million for the current quarter, which included the new iPhone 11s.
The shift to 5G may push smartphone builds "pretty significantly," said TheStreet's Tech Editor Nelson Wang. "That's going to be one of the big catalysts for people upgrading their phones."
"I'm a little surprised that Goldman took this long to upgrade its forecast -- 50 million was definitely a low-end number," said TheStreet's Tech Columnist Eric Jhonsa. But "as far as Apple goes, I could see some people holding off on buying the current-gen iPhones and waiting for the 5G iPhones to launch."
Here's the real opportunity Jhonsa sees for exposure to 5G:
Chip makers Skyworks Solutions (SWKS) - Get Report , Qorvo (QRVO) - Get Report , Qualcomm (QCOM) - Get Report , and Broadcom (AVGO) - Get Report will likely see a big lift, which their share prices may certainly respond to as estimates are revised upwards. Those chip makers see a high portion of their revenue and earnings from smartphones and are making chips and inputs that power the 5G technology. On Monday, Skyworks stock rose 1.94%, with Qorvo rising 1.32% and Broadcom up 0.42%. Qualcomm was slightly down.
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