Last week, shares of Qualcomm jumped as much as 23 percent in a single day as the semiconductor company, which mainly produces chips used in smartphones, settled an ongoing dispute with Apple and come to a new agreement between the two.
Ever since, shares of the chip maker have continued to surge, jumping up a further 5.7 percent in Tuesday’s trading session. This marks the best 5-day performance for the company’s stock price since 1999.
Analysts across Wall Street are jumping on the excitement as many upgraded their expectations for the company’s stock price. Morgan Stanley analyst James Faucette raised his rating of the company from “equal weight” to “overweight” while also listing his target price for the company by 73 percent up to $95 per share, around a 10 percent premium from current skyrocketing price levels.
“We upgrade to [overweight] as we see new opportunities and optionality as more attractive than risks potentially overlooked by any near-term settlement-induced euphoria,” wrote the analyst in a note according to MarketWatch. Faucette added that the Apple agreement not only increased the company’s earnings significantly but that it also gave Qualcomm newfound freedom to explore new opportunities now that it has a secure source of income. This way, the company can add other revenue streams in other markets and earnings growth can accelerate over the coming years. His most bullish appraisal for the company puts the stock price at $120 per share, or around 40 percent above current levels.
Previously, analysts had regarded Qualcomm with contempt, considering the company an unviable investment opportunity altogether during the period of its legal battle with Apple. With that now out of the way, many have jumped on the bandwagon, with a number of analysts giving appraisals of over $100 per share.
For traders looking to ride on the momentum of a relatively large company, Qualcomm seems like a good potential bet for both short term as well as long term investors alike.
Qualcomm Company Profile
Qualcomm develops and licenses wireless technology and also designs chips for mobile phones. The company’s key patents revolve around CDMA and OFDMA technologies, which are standards in wireless communications that are the backbone of all 3G and 4G networks. In turn, Qualcomm’s IP is licensed by virtually all wireless device makers.
The firm is also the world’s largest wireless chip vendor, supplying many premier handset makers with leading-edge processors. – Warrior Trading News
Apple Company Profile
Apple designs a wide variety of consumer electronic devices, including smartphones (iPhone), tablets (iPad), PCs (Mac), smartwatches (Watch), and TV boxes (Apple TV), among others. The iPhone makes up the majority of Apple’s total revenue. In addition, Apple offers its customers a variety of services such as Apple Music, iCloud, AppleCare and Apple Pay, among others.
Apple’s products run internally developed software and semiconductors, and the firm is well known for its integration of hardware, software and services. Apple’s products are distributed online as well as through company-owned stores and third-party retailers. The company generates about 40% of its revenue from the Americas, with the remainder earned internationally. – Warrior Trading News