#7 - Qualcomm (NASDAQ:QCOM)
There were many reasons to buy Qualcomm (NASDAQ:QCOM) stock before its most recent earnings report. After the company had a beat in both earnings and revenue on July 29, the stock is starting to show the promise that investors have been waiting on for the last five years.
The bullish case for Qualcomm is found in the promise of China and 5G technology. That alone should mean the stock should move higher.
It’s no secret to those in the industry that Qualcomm has been eager to sign a contract with Huawei. That has gotten done which is going to be a revenue source that the company needed. However, with the U.S.-China relationship looking to take center stage again, and in an election year no less, the stock may still face some headwinds.
The company is already trying to extend its relationship with Apple for as long as it can. After years of litigation about licensing fees, Apple is committed to using Qualcomm as its sole provider of modems for Apple’s signature iPhones.
But Apple is rapidly developing cellular connectivity technology. Qualcomm probably has a few years left, but the Huawei deal will be a useful catalyst.
About QUALCOMM
QUALCOMM Incorporated engages in the development and commercialization of foundational technologies for the wireless industry worldwide. It operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI). The QCT segment develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies for use in wireless voice and data communications, networking, computing, multimedia, and position location products.
Read More - Current Price
- $156.79
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 15 Buy Ratings, 12 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $210.15 (34.0% Upside)
The companies shown in this presentation should relieve any concerns you have of a sector that is played out. Semiconductors have many catalysts for the rest of 2020. And, the demand for semiconductor products is likely to increase for many reasons.
First, it’s becoming apparent that more people will be working from home at least on a part-time basis. And major companies are migrating to cloud computing. All of this in addition to the 5G revolution will provide a catalyst for semiconductor stocks.
The remainder of 2020 will remain volatile as America gears up for a presidential election. Many of the catalysts that exist for semiconductor stocks will still exist regardless of who wins the election. However, corporations and investors hate uncertainty and so expect some choppy performance until we get a resolution. And that may not be until late November due to the expectation for a heavy load of mail-in voting.
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