Huawei Ban Effects On Stocks: Tough Times For Micron, Qorvo And More

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The United States has blacklisted Huawei on national security grounds. This decision sent ripples across the markets worldwide. Millions use Huawei phones, and the ban would result in dire and consequential effects for several big stakeholders in all markets, including the US. In this article, we mention the biggest US stocks that will be affected due to the Huawei ban.

Infographic: Almost Nobody in the U.S. Has a Huawei Smartphone | Statista
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Alphabet Inc Class C (NASDAQ: GOOG)

The biggest setback from the Huawei ban actually comes for Alphabet, which has lost millions of Android users from China overnight. Just last year, Huawei shipped over 200 million phones having Android OS in them. The move also crushed the company’s huge plans to launch an Android platform for cars in China. In 2014, the company announced its Android platform for cars and had plans to expand it for self-driving cars in China. The biggest hit of all of this will come to Google’s ad business, which has a huge chunk from the App Store.

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Micron Technology, Inc. (NASDAQ: MU)

Micron is another key stock that will be hit after the Huawei ban. Investment firm Needham analyst Rajvindra Gill said that Micron will generate fewer sales as a result of the Huawei ban. The firm reiterated its Hold rating for Micron stock.

The analyst said that Micron supplies flash and DRAM memory chips for both its smartphone and data center markets to Huawei. The analyst cut his adjusted earnings per share estimate for Micron’s August quarter to 68 cents from 96 cents. According to the most recent 10Q filing of Micron, sales to Huawei represented 13% of its revenues in the first half of fiscal 2019.

Qorvo Inc (NASDAQ: QRVO)

Qorvo Inc (NASDAQ: QRVO) is a big loser in the Huawei drama. And the company was quick to accept it. Qorvo immediately revised its guidance to exclude the huge revenue chunk it earns from Huawei. The company now expects revenue of $720 million for the fiscal first quarter of 2020. Huawei accounted for 13% and 8% of Qorvo’s F′19 and F′18 revenue, respectively. The company supplies Huawei’s radio frequency solutions for smartphone applications and other products for wireless base stations, infrastructure, and military applications. In fiscal 2019, the company earned 15% of its revenue, or $469 million, from Huawei.

The author does not own any of the stocks discussed in this article.

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