Strength Seen in Qualcomm (QCOM): Can Its 3.9% Jump Turn into More Strength?
Qualcomm (QCOM) shares rallied 3.9% in the last trading session to close at $110.28. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 7.4% loss over the past four weeks.
Qualcomm shares were largely buoyed by its multi-year agreement with Apple Inc. to provide Snapdragon 5G Modem-RF systems for the upcoming iPhone models. The supply agreement, set to remain in effect until 2026, highlights Qualcomm’s robust portfolio.
In addition to incremental revenues, the deal augments QCOM's leadership position across 5G technologies and products. The deal also gains significance as the chipmaker was expected to record softer revenues from China owing to strict restrictions of iPhone uasge in government offices and state-backed entities as part of its concerted effort toward self-reliance. However, the recent deal with Apple has largely negated this concern and has reposed investors faith in the stock.
This chipmaker is expected to post quarterly earnings of $1.91 per share in its upcoming report, which represents a year-over-year change of -39%. Revenues are expected to be $8.51 billion, down 25.3% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Qualcomm, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on QCOM going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Qualcomm is a member of the Zacks Wireless Equipment industry. One other stock in the same industry, Comtech Telecommunications (CMTL), finished the last trading session 7.7% lower at $8.96. CMTL has returned 3.9% over the past month.
For Comtech , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.17. This represents a change of +950% from what the company reported a year ago. Comtech currently has a Zacks Rank of #3 (Hold).
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QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
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