Cirrus Logic has significantly outperformed Apple over the past six months, delivering 33% returns compared to Apple's 11.6% gains. The semiconductor supplier, which derives 94% of its revenue from providing audio codecs and camera controllers to Apple, is currently trading at a more attractive valuation of 19 times earnings versus Apple's 35 times earnings multiple.
Despite its substantial reliance on a single customer, Cirrus Logic has demonstrated comparable earnings growth momentum to its dominant client. Analysts point to anticipated iPhone upgrade cycles as a potential tailwind for the component supplier, as new device generations typically drive demand for updated audio and imaging technologies.
The valuation differential between the two companies presents a potential opportunity for investors seeking exposure to Apple's product cycle through a more modestly priced equity. However, investors should weigh the significant concentration risk inherent in Cirrus Logic's customer base against the valuation discount the company currently offers relative to its larger peer.