Are IPhone component stocks a buy as Apple plans big new reveals this year?

Our theme of Stocks of Apple Component Suppliers, which includes a diverse range of companies that supply parts for Apple’s iconic iDevices, has done relatively well this year with an increase of about 16%. While the theme had a tough 2022, due to supply chain constraints and strict Covid-19 restrictions in China, things seem to be looking better. China has rolled back its zero-Covid policy and investors are also once again increasing their allocation to technology stocks as inflation cools and the pace of Federal Reserve interest rate hikes slows.

There may also be a few other tailwinds for Apple suppliers. Apple is about to launch a new mixed reality headset sometime this year. The headset will likely be Apple’s first all-new product line in more than six years. While details of the product and its potential components remain scarce, it should benefit selected suppliers. Additionally, Apple’s next-generation iPhone, believed to be called the iPhone 15, will likely feature more pronounced updates. Apple is expected to raise the prices of the flagship variants of the device, after prices have essentially stayed the same for about six years. This could benefit Apple’s suppliers to some extent.

Within our theme, Cirrus Logic
KRUS
, a company that supplies audio processors to Apple, was the best performer with its stock up about 43% year-to-date. Other semiconductor-focused vendors also performed well. For example, Qualcomm
QCOM
stock is up about 11% since the beginning of the year. On the other hand, Corning, the company that supplies Apple with glass for its touchscreens, was the weakest performer with stock up only about 1% year-to-date.

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