Apple (Nasdaq:AAPL) Broadcom (Nasdaq:BRCM) QUALCOMM (Nasdaq:QCOM) Linear Technology (Nasdaq:LLTC) were the recipients of a quick overview from FBR Capital.
Here's what FBR had to say about them all:
"We have updated checks into the Apple supply chain that we discuss below, as well as implications for covered stocks Broadcom, QUALCOMM, and Linear Technology. In short, 4Q supply and production constraints are limiting upside, pushing some of that production into calendar 1Q'11, thus dampening both 4Q'10 upside and 1Q'11 seasonal downside (actually, we expect this year 1Q'11 production will grow for both iPhones and iPads!).
"For Broadcom, the firm's revenues should benefit by roughly one point sequentially in both 4Q'10 and 1Q'11 due to increased iPhone and iPad builds. Despite this, we wonder if a lack of 4Q production upside will limit upside to Broadcom's stock near-term.
"For Qualcomm, our contacts continue to believe that Qualcomm will likely replace Intel (Nasdaq:INTC)/Infineon's (NYSE:IFX) baseband solution beginning in mid-2011 with an integrated CDMA/WCDMA baseband solution that will allow Apple to address more carriers without changing the phone's hardware specifications. Qualcomm's annual EPS could benefit by as much as $0.35 if it supplies into all iPhones and iPads.
"Finally, for Linear Technology, we are somewhat concerned that the firm could cease participating in the iPad beginning in early- to mid-2011, though we do not have any firm evidence of this in hand, nor have our contacts been able to confirm this. We simply note that given Linear's roughly 50% operating margins, Apple may not want to spend $100M on a DC/DC converter and another power management chip for the iPad in 2011 (40M units at $2-$3 of content each). Given that Linear should see roughly $20M of revenue contribution from the iPad in both calendar 4Q'10 and 1Q'11, or roughly 6% of revenues, and given that the automotive and industrial sectors are likely shipping chips at above end-consumption rates, we think some near-term risks exist for shares of LLTC."
Apple closed Wednesday at $314.80, gaining $6.07, or 1.96 percent. Broadcom closed at $45.25, increasing by $1.32, or 3.01 percent. Qualcomm ended the trading day on Wednesday at $48.07, rising by $0.97, or 2.06 percent. Linear Technology closed Wednesday at $33.71, gaining $0.76, or 2.34 percent.
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