At the end of January Apple supplier AMS shares took an incredible leap with the company raising its growth outlook. The outlook was so positive that the company's shares rose 26% in a single day. The company makes sensors for iPhone X. How does a company pound the table and sings songs of victory for the company only to reveal 90 days later that they're going to experience a major downturn due to a major customer of theirs.

Reuters is reporting that AMS head of investor relations Moritz Gmeiner stated that "We are not able to discuss the specific customer, but we are seeing significantly lower business from a large smartphones program and that is having a strong impact on the consumer business and the company as a whole.

For its second quarter, AMS said it expected sales to drop to between $220 million and $250 million, down from the $452.7 million in sales it reported for the first three months of 2018.

The downturn was based on weaker orders and lower forecast orders in the months ahead, Gmeiner said. You could read more on this report here.

Dramatic news like this could mean a few things. AMS seems to be squarely blaming Apple. Yet when Apple switched to OLED, LG and Japan Display suffered similar drops. Did Apple give more business to another supplier that performed better in supplying components for their TrueDepth Camera? Or will Apple's numbers on May 1st surprise the market?

Apple can't react to such a report because they're in a quiet period prior to reporting the fiscal Q2 financials next week. Until Apple reports we can't say if it's an Apple problem or Apple simply favoring another supplier. One thing is for sure, AMS got over confident last month working the market into a frenzy. Now reality is coming back to bite them.

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