What Does NVIDIA Offer That Skyworks Does Not

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Skyworks Solutions (SWKS) and NVIDIA (NVDA) both say their AI data center sales are growing despite tight supply. Buyers of both stocks may be betting on that growth. Mobile chips still brought in 57% of Skyworks' revenue in fiscal Q3 2026, yet the stock trades at 42.6 times earnings, compared with 27.8 for NVIDIA. At that price, Skyworks needs its data center chips to become a large business and its margin to recover through the Qorvo deal. So how big is Skyworks' data center business today?

How Big Is Skyworks' Data Center Business?

Skyworks reports its data center chips as one part of broad markets, a segment that brought in about $403 million in fiscal Q3 2026. Data center, Wi-Fi and automotive components together made up nearly two-thirds of that total, meaning data center chips brought in less than $270 million in the quarter. The chips are growing fast: management said on the July 28, 2026 call that its AI data center business, the company's fastest-growing, is tracking ahead of 50% annual growth.

Skyworks' July forecast for fiscal Q4 2026 focused mostly on phones. Management expected mobile sales to rise from the previous quarter on new launches at its largest customer, and projected broad markets' share of sales to fall to about 39%, down from 43% in fiscal Q3 2026.

NVIDIA's forecast centers on data centers. In fiscal Q2 2027, NVIDIA's data center revenue accounted for $89 billion of its $96 billion total. Management expects fiscal Q3 2027 revenue of $108 billion, plus or minus 2%, and says supply is what limits growth. That is what NVIDIA offers that Skyworks does not: almost all of NVIDIA's sales come from data centers.

Can Skyworks Protect Profit Margins As Costs Rise?

So far, Skyworks has not. Its operating margin was 8.7% over the four fiscal quarters ended July 3, 2026, down from 15.0% a year earlier. Most of that fall came from higher operating costs, since gross margin slipped only to 40.7%, from 41.5%. Management said input costs remained a headwind for gross margin, and Skyworks cannot pass them on quickly. Prices are agreed upon when a customer selects its parts and are not renegotiated afterwards.

Skyworks' combination with Qorvo, completed on October 5, 2026, also brings new debt and interest costs. In July, Skyworks said it expected to raise about $2 billion in debt financing. Skyworks expects to raise about $2 billion in debt financing, and has stopped paying a quarterly dividend so that money can go to buybacks, paying down debt and acquisitions.

NVIDIA faces higher costs too: management said memory prices have risen more than it expected. But NVIDIA has already set price increases of its own, and management expects gross margin to bottom at 71% to 72% in fiscal Q4 2027 before those increases take effect in fiscal Q1 2028. NVIDIA's operating margin was 65.2% over the four fiscal quarters ended July 26, 2026, up from 58.1% a year earlier.

Where Skyworks And NVIDIA Differ On Growth And Price

NVIDIA leads on growth and debt. NVIDIA's revenue rose 83.4% over its latest four fiscal quarters, while Skyworks' revenue was flat. Averaged across three such twelve-month periods, NVIDIA's revenue grew 116.5% a year, against a 6.7% decline for Skyworks. Before Skyworks closed its Qorvo deal, its total debt equalled 5.5% of its market value, compared with 0.7% for NVIDIA.

Skyworks is cheaper against its sales at 3.1 times, compared with 17.7 for NVIDIA. Skyworks' P/E is higher anyway, since each dollar of its sales keeps far less profit than a dollar of NVIDIA's.

If Skyworks' margin does not recover, you keep paying a high price for each dollar of its profit. If its data center chips stay a small slice of the business, you own mainly a mobile chip supplier that gets most of its revenue from its largest customer.

Which Company Comes Out Ahead, And On What?

NVIDIA comes out ahead on revenue growth, operating margin, debt and the price of its earnings. Skyworks is the cheaper stock against its sales, and its data center chips are growing fast inside a company still led by mobile chips. Skyworks' operating margin, still below its level a year earlier, is the number to watch in its fiscal Q4 2026 results.

How To Act On SWKS?

Not necessarily on Skyworks Solutions alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Here are two companies from Skyworks Solutions' own industry that have beaten it. Over the five years to October 2026, ON Semiconductor stock rose 66% and MaxLinear stock rose 44%, while Skyworks Solutions stock fell 43%.

Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.

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