2024 Apple Concept Stock Investment Guide: Seize Opportunities in the Apple Supply Chain

Apple announced the Apple Intelligence project in June 2024, driving the stock prices of related suppliers to soar. This wave of market activity has led many investors to start paying attention to the investment value of Apple concept stocks. What exactly are Apple concept stocks? How can you profit from the expansion of Apple’s supply chain? This article will provide a detailed analysis.

What Are Apple Concept Stocks?

Apple concept stocks refer to stocks related to Apple’s business ecosystem, mainly including two categories: one is companies within Apple’s supply chain, covering component manufacturers, assembly plants, OEMs, etc.; the other is companies that cooperate with Apple in business, such as sales partners, technology licensing, and other collaborators.

These stocks are characterized by performance highly correlated with the sales of Apple products. Apple annually publishes a list of the top 200 global suppliers, and companies on this list often enjoy the benefits of stock price surges, while those removed face downward pressure. For example, after ZhiShen Technology was removed from the supply chain list, its stock price immediately dropped by 5%; when TSMC lost orders from Apple, its stock fell by 5% in a single day.

How Do New Apple Products and Supply Chain Trends Interact?

Apple’s impact on supply chain vendors manifests in several ways. The most direct is the change in the supplier list—entry or exit immediately reflects on stock prices.

In April 2024, Apple announced its 2023 fiscal year supply chain list, including 49 factories in Taiwan. Among them, NanDian returned to the list, and JinJian Printing Group was listed for the first time, while previous entrants like Novatek, Nanya Technology, and GigaDevice were removed. This periodic update directly influences the investment value of related companies.

Changes in supply volume are even more critical. Fluctuations in Apple’s orders and procurement preferences are instantly reflected in the performance of suppliers’ stocks. Compared to others, companies with over 20% of their revenue from Apple orders show the most significant stock price volatility.

How Do Apple Stock Fluctuations Drive Concept Stock Gains and Losses?

Generally, rising Apple stock prices tend to lift the stocks of suppliers, and vice versa. However, the magnitude of the movement depends on each company’s dependence on Apple.

In the first half of 2024, after Apple announced its AI project, its stock surged nearly 20%, and related suppliers also rallied. Broadcom, which supplies wireless charging chips and RF front-end modules, rose 15%; Quanta, which handles MacBook OEM orders, surged over 20%. TSMC, with about 25% of its revenue from Apple orders, saw its stock trend closely aligned with AAPL.

US Stock Apple Concept Stock Investment List

Broadcom (AVGO): A Long-term Beneficiary of AI Chip Supply

Broadcom supplies wireless communication chips and RF front-end modules for all iPhone models, being a core supplier in the Apple ecosystem. After a 105% surge in 2023, its stock has increased by 48% so far in 2024, with a market cap surpassing $771 billion.

Wall Street analysts generally believe that as corporate AI deployment accelerates, Broadcom will continue to benefit from surging underlying hardware demand. The company reported Q2 2024 revenue of $12.487 billion, up 43% YoY, well above expectations; adjusted EPS was $10.96, up 6% YoY. Management also raised the full-year revenue guidance to $51 billion, showing confidence in AI business prospects.

Texas Instruments (TXN): Steady Recovery in Analog Chips

Texas Instruments supplies touch screen controllers, battery management components, and more for Apple, making it another key supplier. Although last year’s revenue continued to decline, by 2024, industry-wide inventory destocking in analog chips was nearing completion, and inventory turnover began to accelerate.

In Q2, revenue reached $3.822 billion, up 4.4% QoQ; net profit increased 1.99% QoQ. As signals of industry recovery strengthen, TXN’s stock performance has been relatively stable, with an increase of nearly 18% this year.

Qualcomm (QCOM): Beneficiary of Smartphone Market Rebound

As the world’s largest smartphone chip supplier, Qualcomm exceeded expectations in its third fiscal quarter. Revenue grew 11% YoY to $9.39 billion; net profit increased 26% YoY to $2.648 billion; EPS was $2.33, surpassing forecasts.

The company provided strong guidance for Q4, implying a rebound in the smartphone market. Since the start of the year, Qualcomm’s stock has risen nearly 20%.

Analog Devices (ADI): Growth Engine for Diversified Applications

ADI supplies analog and signal processing technology to Apple, achieving 13 consecutive quarters of revenue growth. In Q2 2023, EPS grew 18% YoY, exceeding expectations. The company actively expands into automotive, industrial, and communications sectors, pursuing diversification to reduce reliance on a single market. Over the past three years, returns have reached 62%, with stable stock performance.

Skyworks Solutions (SWKS): Potential Stock in 5G and Vehicle Connectivity

Skyworks focuses on wireless communication solutions, supplying RF front-end modules for Apple. Its analog RF technology is widely used in 5G, IoT, automotive systems, and more. Since late 2022, the stock has rebounded, with nearly 25% growth this year, poised to benefit from 5G adoption and rapid electric vehicle development.

TSMC (TSM): Core Driver of Chip Foundry

TSMC is the sole manufacturer of Apple’s A-series chips, with about 25% of its revenue from Apple. In Q2 2024, revenue reached NT$673.51 billion, up 40.1% YoY; net profit was NT$247.8 billion, up 36.3%. HPC (High-Performance Computing) has become a pillar of TSMC’s performance, with a 28% QoQ increase in this segment in Q2. The company is optimistic about strong demand for advanced process nodes from smartphones and AI chips, expecting further growth in Q3.

Investment Opportunities in Taiwan’s Apple Concept Stocks

Besides US stocks, Taiwan’s Apple concept stocks are also worth attention. The following companies are core holdings in Taiwan’s Apple concept stock portfolio.

TSMC (2330.TW): Leading Chip Foundry

TSMC supplies core chips for Apple devices and is one of the most important Apple suppliers globally. The latest financial report shows that in Q2 2024, revenue increased 40.1% YoY to NT$673.51 billion, up 13.6% QoQ; net profit rose 36.3% YoY to NT$247.8 billion, up 9.9% QoQ.

HPC business has replaced mobile as the main growth engine. DCE (Digital Consumer Electronics) also performed strongly, including T-Con, PMIC, WiFi chips, with a 20% QoQ increase. Management is optimistic about the outlook for Q3, expecting continued strong demand for smartphones and AI chips using advanced processes. Year-to-date, stock has gained 63%.

ASE Technology Holding (3711.TW): Expert in System-Level Packaging

ASE mainly handles Apple’s system-level packaging orders through its EMS subsidiary, Huanxu. In April 2024, the company announced it secured an exclusive order from Apple, winning the iPhone 16 series capacitive button system-level packaging module, which will replace existing physical buttons.

Q2 financials show that benefiting from improved packaging and testing efficiency and product mix optimization, gross margin reached 16.4%, a six-quarter high. After-tax net profit was NT$7.783 billion, up 37% QoQ; EPS was NT$1.8. The company remains optimistic about the second half, expecting continued strong growth in AI and HPC fields. Year-to-date, stock has increased 15%.

Delta Electronics (2308.TW): Hidden Champion in Power Supply

Delta Electronics, a supplier of power supplies for Apple, reported Q2 revenue of NT$103.44 billion, up 13.3% QoQ; gross margin soared to a new high of 34%; net profit was NT$9.948 billion, up 72.6% QoQ; EPS was NT$3.83, the second-highest in history.

Management expects the third quarter to enter peak season with better performance than Q2, and Q4 to be flat. The stock has gained over 30% since the start of the year.

Hon Hai (2317.TW) and Quanta (2382.TW): Dual Drivers of OEM and Assembly

Hon Hai, as Apple’s largest OEM manufacturer, and Quanta, a major supplier for MacBook and iPad, both benefit directly from Apple product innovations. Since the start of 2024, Hon Hai has risen 75%, Quanta 30%.

Core Investment Methodologies for Apple Concept Stocks

Strategy 1: Fund or ETF Investment

The simplest way to invest in Apple concept stocks is through semiconductor-related ETFs. Many Apple concept stocks belong to the semiconductor sector, so investing in related ETFs provides a one-stop exposure to most Apple concept stocks.

Recommended options include:

• iShares Semiconductor ETF (SOXX): Top five holdings are NVIDIA (8.57%), Broadcom (8.14%), AMD (7.16%), Intel (6.27%), Texas Instruments (6.09%)
• VanEck Semiconductor ETF (SMH): Top five holdings are NVIDIA (10.77%), Broadcom (10.44%), Analog Devices (9.74%), TSMC (9.60%), AMD (7.68%)

Investing via ETFs effectively diversifies risk and allows you to benefit from the overall industry growth.

Strategy 2: Brokerage Individual Stocks

For those preferring stock picking, Taiwan investors can open accounts with domestic brokers to trade Taiwan-listed Apple concept stocks directly. For US stocks, investors can use domestic brokers’ cross-border trading or US brokerage accounts.

Individual stock trading allows precise targeting of specific companies’ opportunities but requires strong analysis skills and risk management.

What Should Investors Watch Out for When Investing in Apple Concept Stocks?

Risk 1: Impact of Changes in Apple Orders

Fluctuations in Apple’s orders, cancellations, or shifts to other suppliers directly impact related companies. For example, in 2022, when Apple cut orders from TSMC, the stock dropped 5% in a single day. Therefore, close attention to Apple’s procurement trends is essential.

Risk 2: Cyclical Adjustments in Supply Chain Lists

Apple updates its supplier list annually, benefiting new entrants while causing performance declines for those removed. Investors should regularly track official supply chain announcements from Apple.

Risk 3: Industry Cycles and Overcapacity

The semiconductor industry exhibits clear cyclical patterns. During inventory destocking phases, suppliers’ revenues and profits face pressure. For instance, last year, Texas Instruments’ revenue continued to decline, reflecting challenges across the analog chip sector.

Risk 4: Varying Degrees of Diversification Dependence

Different companies depend on Apple to varying degrees. TSMC and Broadcom are highly dependent on Apple orders, while Analog Devices reduces risk through diversified applications. Investors should choose targets aligned with their risk tolerance.

Core Logic of Investing in Apple Concept Stocks

The investment value of Apple concept stocks ultimately derives from Apple’s product innovation and market position. As long as Apple continues to launch new products and expand market share, supply chain companies stand to benefit.

The arrival of the 2024 AI wave has provided new growth momentum for Apple concept stocks. From Broadcom to TSMC, all major suppliers are actively deploying AI-related businesses. This indicates that the long-term investment logic of Apple concept stocks remains valid, but investors need to carefully select companies that truly benefit from Apple’s innovation and AI transformation.

At the same time, it’s important to recognize that Apple concept stocks are not a monolithic concept. Each company’s fundamentals and growth prospects differ; blindly following the trend is not advisable. Rational investment decisions should be based on financial performance, supply relationships, diversification levels, and other factors.