Why Cirrus Logic Rallied Today


An optimistic note from a Wall Street analyst lifted Cirrus and other chip stocks, too.

Shares of audio mixed-signal chipmaker Cirrus Logic (CRUS 3.86%) were rising on Tuesday, up as much as 6.3% at one point before pulling back to a 4.1% gain as of 2:30 p.m. ET. Cirrus rose on the back of a positive analyst note, which had good news for this smartphone-related chipmaker, as well as others.

Keybanc’s checks leave its chip analyst optimistic

In a research note published today, Keybanc analyst John Vinh raised his price target on Cirrus to $155, up from a prior target of $120.

The price-target increase comes from Vinh’s channel checks showing improving expectations for the Apple iPhone 16 this year, especially after the unveiling of Apple Intelligence last month. Of note, Cirrus is a key chip supplier to Apple. According to Vinh, Cirrus should continue to make the iPhone’s audio chips as it usually does and the iPhone 16’s new camera button may use Cirrus’ haptics driver, as well.

Cirrus was just one of several chip upgrades for Keybanc today

The positive note on Cirrus correlated with other price-target increases for other chip stocks from Keybanc today, including Nvidia. Keybanc’s channel checks continue to show traditional servers are returning to growth, while artificial intelligence (AI) demand continues “unabated.”

Increased AI demand may help Cirrus in an indirect way, as the new Apple Intelligence AI capabilities only work with newer phones. Therefore, the new Apple AI capabilities could spur a wave of phone upgrades. As a reminder, Cirrus Logic is extremely dependent on Apple, with 87% of revenue coming from the smartphone giant last year.

Thus, as new functionality from AI permeates more and more devices, the AI revolution should continue to lift most boats in the semiconductor sector.

Billy Duberstein and/or his clients have positions in Apple. The Motley Fool has positions in and recommends Apple and Nvidia. The Motley Fool recommends Cirrus Logic. The Motley Fool has a disclosure policy.



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