|Bid||66.58 x 3200|
|Ask||66.75 x 800|
|Day's Range||65.97 - 69.15|
|52 Week Range||49.10 - 90.34|
|Beta (3Y Monthly)||1.32|
|PE Ratio (TTM)||34.96|
|Earnings Date||Jul 31, 2019|
|Forward Dividend & Yield||2.48 (2.88%)|
|1y Target Est||96.59|
Earlier this month, Qualcomm investors thought some of the chip maker’s legal issues were abating after the company’s big agreement with Apple, but on Wednesday, the company was seen as having more uncertainty after a federal court ruling.
Following the U.S. Commerce Department’s addition of Huawei and its affiliates to its Entity List—which prohibits the sale of certain U.S.-origin technologies to Huawei without a license—Qualcomm’s shares have sold off. While the Huawei uncertainty could impact the timing of QTL [Qualcomm Technology Licensing] negotiations, we believe there is minimal impact to QCT [actual chipsets, used in phones, for example]. In fact, we believe that Huawei is a minor customer for QCT, and we believe that Huawei’s losing share in the handset market is a net positive for Qualcomm, as that share loss is likely to be borne by handset original equipment manufacturers, or OEMs, that are paying full royalties to Qualcomm.
The stock market correction intensified this week along with China trade war fears. Qualcomm and other chipmakers dived. So did department stores and Tesla.
Qualcomm investors thought some of its biggest legal issues were abating after the company’s recent agreement with Apple. But a federal court ruling has tossed the chip maker right back into a sea of uncertainty.
Last week, the U.S. Commerce Department added Huawei Technologies to its Entity List, saying, “The U.S. government has determined that there is reasonable cause to believe that Huawei has been involved in activities contrary to the national security or foreign policy interests of the United States.” This in effect bars the Chinese telecom equipment maker from doing business with U.S. companies, although the trade restriction was given a 90-day reprieve a few days later.
With President Donald Trump’s latest move to put Huawei on an export blacklist, U.S. companies that supply components, services, or technical support to the Chinese telecom giant will all take a hit.
The Qualcomm antitrust case illustrates unusual friction between the Federal Trade Commission and the Justice Department—with 5G in the background.
Qualcomm stock’s big plunge this week is a buying opportunity, according to Bank of America Merrill Lynch.
Tech stocks fell further than most other sectors -- they sank in response to an apparent escalation of the trade war between the U.S. and China. West Texas crude oil prices dropped even more than that. The chip maker’s stock started tumbling after a U.S. court ruled against it in an antitrust case late on Tuesday.
Dhiraj Bajaj, whose Lombard Odier Asia Value Bond Fund outperformed 98% of peers this year, sold the fund’s Huawei 2026 dollar notes after the Trump administration placed the company on a blacklist that curtails access to U.S. suppliers. The world’s largest provider of networking gear has become a key focus for global investors as they assess the fallout from rising tensions between China and the U.S. over everything from trade to espionage and technological dominance. While some analysts have argued that Huawei’s default risk is minimal given its large cash holdings and potential support from China’s government, Bajaj said the U.S. blacklist has raised questions about future cash flows.
Politics hung heavily over the business world this week. Shares fell as the trade dispute between the US and China deepened. Elections for a new European Parliament raised fears of protectionism from the populist right.
Heightened worries that the U.S. and China are headed for a long standoff in their costly trade dispute put investors in a selling mood Thursday
Qualcomm (QCOM) stock has taken investors on quite a roller-coaster ride recently. The stock was trading around $90 earlier this month after reaching a settlement with Apple over patent royalties. The settlement also opened up the possibility that Apple will release a 5G iPhone with Qualcomm’s modem technology. However, news broke Wednesday morning that a court ruled the company violated antitrust law in the phone chips space, sending shares back to $68.What's next? Susquehanna's Christopher Rolland remains optimistic about Qualcomm's future, reiterating a Positive rating but cutting the price target by 15% from $100 to $85 based on the ruling. (To watch Rolland's track record, click here)Judge Lucy Koh ruled with the FTC, saying “Qualcomm’s licensing practices have strangled competition…” which have harmed rivals and consumers. As part of the ruling, which Qualcomm is appealing, Koh said the company must change its business practices, including renegotiating licensing agreements, offering to license its patents to rival chipmakers and no longer signing exclusive agreements with smartphone makers that block rivals. After just recently signing a licensing agreement with Apple, Rolland says that Apple “may have the opportunity to renegotiate its long-term agreement with Qualcomm.” Though he does not know for sure how it would play out, Rolland expects Apple to “have the opportunity to break the multi-year chip agreement if they choose to use another supplier.” But while Apple may gain some power, the company still relies on Qualcomm for gettings its iPhone to 5G, so Rolland believes it will “tread lightly” with Qualcomm. Moving forward, Rolland expects Qualomm’s legal expenses to “likely remain elevated,” as the company appeals the ruling. If the appeal is lost, Qualcomm “profitability may be significantly reduced as the judge did not believe Qualcomm could charge a royalty on the end device (handset), but rather the modem.” Finally, though Rolland says this only has a small impact, “this ruling allows for customers to more easily break long-term chip agreements,” which may cloud investors’ revenue vision for the future. All in all, Qualcomm stock is diving as investors' excitement about the Apple deal has waned. However, analyst are still bullish on the long-term, as Qualcomm has proved its place as a leader in 5G. TipRanks analysis of 21 analyst ratings shows a consensus Moderate Buy rating, with 15 analysts saying Buy and six Hold. The average price target among these analysts stand at $85.76, about 29% above current levels. Read more on QCOM: * A Look at Qualcomm (QCOM)-FTC Outcome and Its Impact on Apple (AAPL) * Will Qualcomm (QCOM) Stock Price Get Back to $60-65? * Qualcomm (QCOM) Stock Is a Buy Despite Huawei Saga, Says Analyst More recent articles from Smarter Analyst: * Love or Hate Aurora Cannabis (ACB) Stock, That’s Where the Money Is * Micron's (MU) Tech Roadmap Highlights Flattening Cost Curve, Says Analyst; Reiterates Neutral on the Stock * Time to Cash Out on Cannabis Stock Canopy Growth (CGC) * GW Pharmaceuticals (GWPH) Stock Could Run Much Higher Over Time
Qualcomm Inc. shares fall for a second day as analysts respond to renewed uncertainty at the chip maker with a downgrade and price cuts.
Ned Davis Research points out that Qualcomm had 67% of its 2018 revenue come from China, while Micron saw 57.1% of its sales come from the second-largest economy in the world. Investors trying to get a gauge on the state of U.S.-China trade relations should look at shares of big chipmakers like Qualcomm, Micron Technology and Broadcom, according to Ned Davis Research. The firm points out that Qualcomm QCOM had 67% of its 2018 revenue come from China, while Micron MU saw 57.1% of its sales come from the second-largest economy in the world.
The Latest on Market Volatility, Apple, Chip Stocks, and More(Continued from Prior Part)Qualcomm fell 11% after judge ruled that it violated antitrust lawQualcomm (QCOM) stock fell 10.9% on May 22 and an additional 3.3% in after-hours trading on the
President Trump declared a national emergency last week -- and if you think that had something to do with global warming, terrorism, or even immigration policy, you may not have been paying close enough attention.No, this one has to do with competition in the tech sector, and specifically, competition from Huawei to lead the development of new 5G wireless technology around the world. Supported by generous state subsidies, and probably not a little state-sponsored espionage, Huawei has made great strides in developing the tech need to build a 5G infrastructure in China, in Europe, in Africa, and potentially, in the United States itself. However, as a company presumed to be under the influence of China's state security apparatus, the Trump Administration views Huawei as a clear and present danger -- if not necessarily to national security, then certainly to the peace of mind of U.S. tech firms that must compete with it.Thus, to stymie Huawei's growing influence, last week the President empowered the U.S. Secretary of Commerce to effectively "blacklist" Huawei and prevent U.S. companies from doing business with the Chinese tech giant. This order cuts off Huawei from access to microchips and other tech components essential to the manufacture of much of its 5G equipment -- everything from handsets to base stations.It also, however, prevents many U.S. companies from making sales to Huawei. And in so doing, it's hitting the business of U.S. tech giants from California -- Qualcomm (QCOM) and Broadcom (AVGO) to North Carolina -- Qorvo (QRVO) and Cree (CREE) to Massachusetts where Skyworks (SWKS) resides. Qorvo in particular looks at risk, with analysts estimating the company derives as much as 15% of its revenue from sales to Huawei (versus, for example, Broadcom, which does "de minimis" business with the Chinese company).Conversely, the Trump Administration blacklist effectively cripples Huawei's business, which depends on electronic components such as radio frequency modules, antenna tuners and other components, supplied by these American tech firms and essential to Huawei's manufacture of its 4G handsets today. Without them, the company may not live to invent the 5G tech of tomorrow. Even if the company does survive, though, Huawei's 5G tech is believed to depend on such U.S.-supplied components as "GaN power transistors" needed to build RF power amplifiers, and "silicon carbide (SiC) wafers" on which those transistors are housed, as explained in a note this week from Charter Equity Research analyst Edward Snyder.For the time being, Huawei is drawing down stockpiles of such essential components, amassed in anticipation of a ban on trade with the company. Once these supplies run out, however, Snyder warns that the company could be in something of a bind.Snyder identifies Japan's Murata Manufacturing as one potential alternative supplier of "diversity receive" (DRX) radio frequency modules -- albeit a distant second to main supplier Skyworks -- and Japan's TDK is a potential source of filters. Then again, China isn't exactly on the best of terms with Japan right now, either. (The two countries are continually feuding over ownership of certain islands in the East China Sea). Further complicating matters, TDK has a joint venture with Qualcomm, and therefore may find itself subject to the same ban restricting Qualcomm's selling to Huawei.By and large, therefore, it's Snyder's assessment that "there are no other suppliers, Chinese or otherwise, capable of filling the void left by the ban on U.S. components," and this blacklisting is likely to "devastate Huawei's phone business," at least in the 4G realm, while its development of 5G tech will "slow considerably." Conversely, in the analyst's opinion, the Trump Administration's ban on sales to Huawei is likely to accrue to the benefit of rivals like Korea's Samsung, and to Oppo, Vivo, and Xiaomi in China.At least, until the Trump Administration decides to blacklist those companies, as well.Read more: * A Look at Qualcomm (QCOM)-FTC Outcome and Its Impact on Apple (AAPL) * Will Qualcomm (QCOM) Stock Price Get Back to $60-65? * Qualcomm (QCOM) Stock Is a Buy Despite Huawei Saga, Says Analyst More recent articles from Smarter Analyst: * Love or Hate Aurora Cannabis (ACB) Stock, That’s Where the Money Is * Micron's (MU) Tech Roadmap Highlights Flattening Cost Curve, Says Analyst; Reiterates Neutral on the Stock * Time to Cash Out on Cannabis Stock Canopy Growth (CGC) * GW Pharmaceuticals (GWPH) Stock Could Run Much Higher Over Time
QUALCOMM, Inc. (NASDAQ: QCOM) shares are down 16.3 percent this week after a judge ruled Qualcomm violated antitrust laws in imposing excessive licensing fees for its cell phone chips. The judge ruled in favor of the Federal Trade Commission, which argued that Qualcomm took advantage of its chip monopoly by engaging in non-competitive practices. In a 233-page decision, U.S. District Judge Lucy Koh said Qualcomm has “strangled competition” in key markets.
could cut the chipmaker's earnings per share in half, Mizuho analyst Vijay Rakesh said in a note Thursday. A California judge ruled in favor of the FTC's case, saying Qualcomm's chip-licensing practices were anti-competitive. Several analysts said Wednesday they're now more cautious on the Qualcomm stock, as the ruling is a threat to sales.
Mizuho analyst Vijay Rakesh cut his rating on Qualcomm Inc. shares to neutral from buy on Thursday, after a federal judge sided with the Federal Trade Commission and ruled that the company violated antitrust law with its patent royalties. "The limited clarity as the case goes to appeals to the Ninth District and potentially the Supreme Court, and uncertainty if recent license agreements with Apple , Samsung and China NDRC can still be upheld, inserts a significant overhang on Qualcomm," Rakesh wrote. The ruling "could potentially drive EPS down 50%+ in a worst case scenario," he continued. Shares are off 2.6% in Thursday trading after dropping nearly 11% in Wednesday's session. The stock remains up 19% on the year, as the S&P 500 has risen 13%.
This week's major tech stories include new Intel chips in Macbooks, Qualcomm's monopoly ruling and new portable game console from iOS software vets, Panic.