A class action lawsuit was filed against Skyworks Solutions, Inc. (SWKS) by Levi & Korsinsky on March 4, 2025. The plaintiffs (shareholders) alleged that they bought SWKS stock at artificially inflated prices between July 30, 2024 and February 5, 2025 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Skyworks Solutions stock during that period can click here to learn about joining the lawsuit.
Skyworks manufactures both analog and mixed-signal semiconductors for wireless connectivity applications across various sectors, including aerospace, automotive, broadband, connected home, defense, medical, and wearables. Its operations are spread across Asia, Europe, and North America.
The company’s tall claims about the future growth potential from its mobile business are at the heart of the current complaint.
Skyworks Solutions’ Misleading Claims
According to the lawsuit, Skyworks and two of its senior officers (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about the Company’s client base, including Skyworks relationship with Apple (AAPL), and ancillary issues, from SEC filings and related material.
For instance, during the Class Period, the CEO stated in the Q4FY24 results that artificial intelligence (AI) is expected to drive a transformative smartphone upgrade cycle. This would induce demand for higher levels of RF (radio frequency) complexity.
Additionally, during the related earnings call, the CFO noted that the company’s mobile business was expected to grow by mid-single digits sequentially, aided by seasonal product ramps. Plus, the company projected modest sequential growth and a return to year-over-year growth once markets begin to stabilize. Notably, Skyworks was also facing excess inventory issues in select segments like industrial, automotive, infrastructure, and networking.
However, subsequent events (discussed below) revealed that Skyworks Solutions allegedly misled investors about the revenue prospects for Fiscal 2025 only to disappoint later.
Plaintiffs’ Arguments
The plaintiffs maintain that the defendants deceived investors by lying and withholding critical information about the business and prospects during the Class Period. Importantly, the defendants are accused of misleading investors about the expected growth in its mobile business and overall revenue projections for Fiscal 2025.
The information became clear after the market closed on February 5, 2025, when Skyworks announced its Q1FY25 results. The company’s Q1 revenues declined by 11.1% year-over-year. What’s worse, Skyworks provided lower-than-expected revenue guidance for Q2, attributing the poor performance to the increasingly “competitive landscape” evolved in recent years. Investors and analysts were disappointed by the news, dragging down its stock price by nearly 25% the next day.
To conclude, the defendants allegedly misled investors about the growth potential of its mobile business and overall revenue expectations. Owing to these challenges, SWKS stock has lost 25.7% so far this year.
