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QCOM
QUALCOMM Inc. (NASDAQ)
How Apple is Affecting Qualcomm?
Qualcomm
stock prices are highly dependent on the success of Apple’s development of its
5G modems for the Iphone division. This division was recently acquired by Apple
from Intel in order to dump chip supplies from Qualcomm that has the monopoly
of this type of chip manufacturing. The U.S. Supreme Court gas finally declined
Apples bid to continue fighting over two related Qualcomm patents. Qualcomm has
estimated that a positive effect will come from an additional $2 of EPS from
this trial as the company would receive royalties from Apple even if its
smartphones and computers would be equipped only with their own chips. Thus,
the decision of Apple to replace Qualcomm CPU chips in Macbooks with their own
came as a surprise because Apple would have to pay royalties anyway.
The leading
role of Qualcomm in 5G chip manufacturing secures stable cash flows, while
Apple is rumored to be failing to create an appropriate replacement for
third-party chips, leaving Qualcomm an exclusive chip maker for new Iphone
models. Apple forecasted that it would acquire 20% of third-party 5G chips, but
now it seems this figure would be close to 100%.
Qualcomm is
also benefiting from electric vehicles and self-driving vehicles, as producers
secured $16 billion from digital devices that are planned to be produced.
According to the company’s management it will boost this business revenue to
$3.5 billion a year in the 2024-2026 period. QCOM shares are traded 30% off its
peak values with P/E ratio at 9. This ratio is seen to be underestimated as
Qualcomm is likely to lower its dependence from Apple as its major client is considering
significant progress in many other company divisions, including IoT.
The
mid-term target price for QCOM shares is at $150.
QUALCOMM Inc. (NASDAQ)
Ticker | QCOM |
Contract value | 100 shares |
Maximum leverage | 5 |
Date | Short Swap (%) | Long Swap (%) | No data |
---|
Minimum transaction volume | 0.01 lot |
Maximum transaction volume | 100 lots |
Hedging margin | 50% |