Skyworks Solutions (NASDAQ: SWKS) shares rose 11% to $87.92 during Tuesday’s trading session, making the company the top performer among S\u0026P 500 constituents after falling more than 10% in the previous session. The stock’s advance was driven by Apple’s introduction of its “Duo” foldable smartphone and an update on Skyworks’ planned $22 billion acquisition of Qorvo.

Skyworks reached an intraday high of $88.15 after opening at $80.54, moving closer to its 52-week high of $92.30. The rally reversed Monday’s steep selloff and made Skyworks a notable exception during a weaker broader market session. The S\u0026P 500 fell 0.5%, the Dow Jones Industrial Average declined 1%, and the Nasdaq Composite dropped 0.6%.

Apple’s unveiling of the “Duo” marks the technology company’s entry into foldable smartphones, with the device positioned at a premium price. Skyworks is a primary supplier of radio-frequency semiconductor solutions for Apple’s mobile devices, and the announcement prompted optimism among investors over the potential significance of the new product category for the company.

The second catalyst came from Skyworks Chief Executive Officer Philip Brace, who provided an update on the Qorvo transaction while speaking at the Goldman Sachs communications and technology conference. Brace said the acquisition had reached its final regulatory review phase, with clearance still required from only two governmental jurisdictions.

Brace said the two companies are “preparing to close this fiscal year,” indicating that the transaction could be completed by late September or early October. The deal includes both cash and equity components and would combine two major suppliers of components used in Apple’s iPhone.

Once completed, the acquisition is expected to create a $22 billion American semiconductor company focused on radio-frequency, analog, and mixed-signal technologies. Brace described the transaction as “transformative” for Skyworks and the broader semiconductor industry. He also pointed to “super attractive” growth opportunities for the combined company’s product portfolio in the aerospace and defense markets.

Management expects the merger to produce approximately $500 million through combined cost savings, operational efficiencies, and revenue growth opportunities. The remaining regulatory reviews, the timing of the closing, and the companies’ progress toward those expected savings are the next developments closely tied to the transaction. Market participants have closely followed the transaction because of its potential effect on the analog and mixed-signal semiconductor industry.

Qorvo shares also advanced Tuesday, rising 7.2% to $115.79 after declining 7.4% on Monday. Qorvo gained 13% during the previous week and was up 21% in September. Its shares have tracked Skyworks’ performance closely because of the fixed share-exchange ratio included in the merger terms.

Skyworks’ Tuesday gain extended its recent advance. The shares rose 19% during the prior week and had gained 31% in September through Tuesday’s close. The stock remained 56% below its record closing price of $199.66, reached on April 26, 2021.

On a longer-term basis, Skyworks was up 39% year to date and had returned 18% over the preceding 12 months. The shares continued to rise from Tuesday’s opening price as trading activity increased during the morning session.

Source: Blockonomi