Qualcomm is known as one of the leading chips manufacturers for mobile phones, but the company is now expanding into the vehicle sector and is set to supply another set of automobile chips.
Qualcomm To Supply Computing Chip To Renault
Chip manufacturer Qualcomm revealed earlier today that it would be supplying a crucial computing chip in a new Renault SA electric vehicle. The company announced this earlier today, adding that the computing chip is for the digital dashboard in the electric vehicle.
Qualcomm has made a name for itself as the biggest smartphone chip manufacturer in the world. However, the company has been expanding into manufacturing chips for electric vehicles and has landed another client.
The chip manufacturer stated that Renault’s Mégane E-TECH Electric would use Qualcomm’s chips. The chips will power the electric vehicle’s infotainment system using software designed by Google.
This latest development means that Qualcomm has landed another client in the electric vehicle sector. Qualcomm announced a deal with General Motors earlier this year. The deal would see General Motors use Qualcomm’s chips on its vehicles.
The Mégane E-TECH Electric is expected to go on sale by next year. However, it will be unveiled at September’s IAA Mobility 2021 automotive trade show in Munich.
Qualcomm And Others Need To Be Innovative
Qualcomm’s move into the automobile sector is important considering the fact that it is set to lose a chunk of its business in the mobile phone industry. Apple is already developing chips for its mobile devices, and Google is also working on developing chips for its mobile phones.
With phone manufacturers already developing their own chips for their mobile devices, chip manufacturers such as Qualcomm, Nvidia, and Intel will have to be innovative and explore new markets.
The shares of Qualcomm are down by 0.32% over the past 24 hours. QCOM is trading at $144.65 per share at the moment. Year-to-date, QCOM has underperformed. QCOM started 2021 trading at $150 per share, but it is now trading at $144.
The companies could reach an agreement as early as mid-September, and Western Digital CEO David Goeckeler would run the combined firm, the person said, requesting anonymity to discuss confidential matters.
The Wall Street Journal reported the talks earlier on Wednesday. Kioxia Holdings Corp and Western Digital both told Reuters they do not comment on speculation about mergers.
A combination of the two would rewrite the competition to capture robust demand for memory chips that has been driven by 5G expansion and a pandemic-fueled rise in work from home.
While Samsung dominates with over a third of the NAND market, according to research firm TrendForce, Kioxia has a nearly 19% share and Western Digital 15%. South Korea’s SK Hynix Inc and U.S. firms Micron Technology Inc and Intel Corp are the other large players.
“Such a deal would be a defensive, but prudent, move by Western to reinforce its competitive position in the swiftly consolidating chip market,” Morningstar analyst William Kerwin said in a research note.
“In the long term, we expect the NAND market to … consolidate down to about three leading players for a largely commodity-like product,” Kerwin said.
The memory chip industry is already consolidating, with Hynix agreeing to buy Intel’s NAND business for $9 billion last year, a deal still awaiting anti-trust clearance.
A Western Digital-Kioxia merger is also likely to draw anti-trust scrutiny in several countries, including in the United States and China.
Monopoly concerns and a years-long trade conflict between the United States and China have scuppered deals in the past few years.
Qualcomm Inc, for instance, walked away from a $44 billion deal to buy NXP Semiconductors after failing to secure Chinese approval in 2018, and Nvidia Corp’s planned $40 billion acquisition of British chip designer ARM hit a major hurdle last week in the UK.
Chinese antitrust watchdog State Administration for Market Regulation did not immediately respond to a request for comment on approval for a potential Western Digital-Kioxia deal.
In Japan, the two companies jointly produce NAND chips, which don’t need power to retain data and are used in smartphones, TVs, data center servers and public announcement display panels.
“For privately held Kioxia, we think $20 billion or more would secure a solid return,” Morningstar’s Kerwin said.
Kioxia, sold by Toshiba Corp in 2018 to a consortium led by Bain Capital for $18 billion as Toshiba Memory Corp, shelved plans last year for what would have been Japan’s largest initial public offering in 2020.
An IPO is still a possibility should Kioxia fail to reach a deal with San Jose, California-based Western Digital, the source told Reuters. Financial magazine Diamond in June said Kioxia was planning an IPO as early as September.
Kioxia said in its statement to Reuters on Thursday that it was considering the appropriate timing for an IPO.
Toshiba, which still owns about 40.6% of Kioxia, is in talks with at least four global private equity firms to seek their ideas for a new strategy, Reuters reported on Wednesday, citing sources.
Toshiba’s shares were up 1.3% in afternoon trading.
Western Digital’s shares closed up 7.8% on Wednesday, giving it a market capitalization of more than $20 billion.
Toshiba said it was not involved in the management of Kioxia and not in a position to comment. It said it continues to consider the most appropriate approach to its investment in Kioxia to maximize shareholder value.
(Reporting by Eva Mathews in Bengaluru, Krystal Hu in New York and Makiko Yamazaki in Tokyo; Additional reporting by Brenda Goh in Shanghai; Writing by Sayantani Ghosh; Editing by Stephen Coates and Tom Hogue)
Search engine giant Google has announced that it would no longer be using Qualcomm’s processors on its smartphones as it would start building its own processors this year.
Google To Start Building Its Processors This Year
Tech giant Google revealed earlier today that it would start building its own smartphone processors this year. According to its announcement, the processor would be called Google Tensor, and it will serve its new Pixel 6 and 6 Pro phones set to be released later this year.
This latest development means that Google will no longer be using chips manufactured by Qualcomm. However, Qualcomm pointed out that it would continue to work with the search engine giant on existing and future products based on its Snapdragon platform.
The Google Tensor processor is expected to power the company’s new flagship phones, which are expected to be launched in October. The Pixel 6 and 6 Pro phones will see Google move away from offering affordable smartphones to high-end products. Google is looking to compete with Apple and Samsung by offering more high-end products to its customers.
The move by Google is similar to that of Apple. The iPhone manufacturer ditched Intel and began manufacturing its own processors. Similar to Apple, Google will use Arm-based architecture for its processors. Arm processors are usually lower power and are mostly used across the industry for mobile devices, such as phones, tablets and laptops.
Qualcomm And Google Shares All Up As The Market Opens
The shares of Qualcomm and Google are both up as the United States market opens today. QCOM is up by 0.05% today despite the news that Google will no longer be using its smartphone processors. Year-to-date, QCOM has remained rather flat as it began the year trading at $150, and it is now trading at $149.90 per share.
GOOGL, on the other hand, is up by 0.08% so far today. Google is one of the best-performing stocks this year, up by 53% year-to-date. Google began 2021 trading at $1,752 per share, but an extended rally has seen it gone up by nearly $1,000 as it is now trading at $2,696.
U.S. chip manufacturer Qualcomm has offered to invest in U.K. chip designer Arm if the company’s $40 billion acquisition by Nvidia fails to go through due to regulatory concerns.
Qualcomm ready to invest in Arm
Nvidia has tabled a $40 billion offer to purchase U.K. chip designer Arm. However, the deal is facing some regulatory uncertainties and could be blocked from happening. If that happens, U.S. chip manufacturing giant Qualcomm has revealed that it would be ready to invest in Arm.
Qualcomm’s incoming CEO, Cristiano Amon, stated that the company is willing to buy a stake in Arm alongside other major investors. However, the deal depends upon SoftBank, Arm’s current owners, not selling the company to Nvidia.
Amon said pointed out that if Arm has an independent future, then there would be a lot of interest from numerous companies within the sector, including Qualcomm, who are ready to invest in Arm. If Arm is no longer under SoftBank and moves to become a publicly traded company, it would have numerous companies investing in it and that would ensure great possibilities for Arm, he added.
The incoming CEO said Qualcomm is open to the idea of investing in Arm, and he has held discussions with certain companies that feel the same way.
An IPO would not be enough for Arm
Although Qualcomm is in support of Arm becoming an independently listed company, Nvidia believes the move would not be enough to support Arm’s growth. Arm’s energy-efficient chip architecture is used in 95% of the world’s smartphones. The company also licenses its chip designs to hundreds of companies globally that use the designs to develop their own chips.
Nvidia believes Arm needs more than an IPO to help with its growth. Instead, Nvidia said it would welcome Qualcomm’s help in creating new products and technologies for Arm.
Qualcomm’s stock price is up by less than 1% since the news broke out, while Nvidia’s stock is also up by less than 1% since the market opened.
QUALCOMM Incorporated (QCOM) shares surged 5.21% in extended-hours trade Wednesday after the company delivered a quarterly earnings report that blew past Wall Street’s expectations.
The San Diego-based chipmaker disclosed a fiscal second quarter (Q2) adjusted profit of $1.90 per share, with the figure coming in ahead of the $1.67 consensus mark and growing 116% from a year earlier. Meanwhile, revenues of $7.94 billion topped the Street forecast and surged 52% from the March 2020 quarter. Management credited higher phone demand and robust handset shipments to China for the better-than-expected results.
Moving forward, the company sees fiscal Q3 adjusted earnings of $1.55 to $1.75 per share on revenues of $7.1 billion to $7.9 billion. Analysts forecast adjusted EPS of $1.52 and $7.11 billion in sales. “Looking ahead, Qualcomm is well-positioned for continued growth, and we remain confident in our ability to execute on the many opportunities in front of us,” said CEO Steve Mollenkopf in a statement accompanying the results, per MarketWatch.
Through Wednesday’s close, Qualcomm stock has a market capitalization of $156.78 billion, offers a 1.99% dividend yield, and trades 10.35% lower since the start of the year. However, the shares have gained over 80% over the past 12 months, outpacing the sector average by 6%. Valuation-wise, the stock trades 18.5% above its five-year average forward earnings multiple of 16.
Wall Street View
Earlier this month, Susquehanna analyst Christopher Rolland downgraded the stock to ‘Neutral’ from ‘Positive’ and trimmed his price target from $175 to $155. Rolland cited valuation concerns for the downgrade. “Industry lead-times and valuation multiples have expanded to levels well beyond their historical averages, adding potential risk to this already volatile sector,” he said.
Elsewhere, the stock receives 16 ‘Buy’ ratings, 2 “Overweight’ ratings, 9 ‘Hold’ ratings, and 1 ‘Sell’ rating. Brokerage twelve-month price targets range from $122 to $200, with the median sitting at $170.
Technical Outlook and Trading Tactics
Qualcomm shares have spent the past six weeks tracking along an uptrend line extending back to the March 2020 pandemic low. Furthermore, the price also finds support from the rising 200-day simple moving average (SMA).
Thursday’s expected rally from this level may act as a catalyst for the next significant move higher, possibly up to the all-time high (ATH) at $167.94. Those who take a trade here should minimize the downside with a stop-loss order placed beneath last week’s low at $132.47.
The world’s biggest mobile phone chipmaker Qualcomm’s shares slumped as much as 8.4% in extended trading on Wednesday after the company warned that the global semiconductor industry is struggling hard to keep up with demand due to supply chain constraints.
“The shortage in the semiconductor industry is across the board,” said incoming Chief Executive Officer Cristiano Amon, Bloomberg reported.
“Based on Qualcomm’s management, its performance was curbed by supply constraints. Its foundry partners are currently struggling to keep up with demand in some areas of the industry. The management did not specify which products are in shortage but according to our recent checks with Chinese smartphone assemblers, Qualcomm’s PMIC is in severe shortage and therefore volume growth was capped, “according to Fubon Research.
Following this, Qualcomm shares slumped as much as 8.4% to $148.7 in extended trading on Wednesday. However, the stock rose over 70% in 2020.
Qualcomm reported sales of $8.24 billion, missing the Wall Street consensus estimate of $8.27 billion. However, the adjusted profit came in at $2.17 per share, beating the market expectations of $2.10 per share.
“Qualcomm reported fiscal first-quarter results consistent with management’s guidance, with the firm benefiting from the ongoing ramp of 5G smartphones. Chipset, or QCT, sales were boosted by Apple’s 5G iPhone 12 that features the Qualcomm modem and other content such as a transceiver and subsystem for the sub-6 GHz portion of the overall 5Gmodule,” said Abhinav Davuluri, sector strategist at Morningstar.
“For calendar 2021, management expects high-single-digit unit growth for smartphones, with a range of 450 million to 550 million 5G handset shipments. Shares of narrow-moat Qualcomm were down 6% after hours, which we attribute to the market having lofty expectations after Skyworks, a major RF supplier, recently beat its quarterly guidance by more than 40%. That said, the firm’s results and forecast were ahead of our prior expectations, and thus we are raising our fair value estimate to $136 per share from $124. Nevertheless, shares look overvalued at current levels.”
Qualcomm Stock Price Forecast
Twenty-four analysts who offered stock ratings for Qualcomm in the last three months forecast the average price in 12 months at $171.61 with a high forecast of $200.00 and a low forecast of $125.00.
The average price target represents a 5.74% increase from the last price of $162.30. From those 24 analysts, 17 rated “Buy”, seven rated “Hold”, and none rate “Sell”, according to Tipranks.
Morgan Stanley gave a base target price of $171 with a high of $194 under a bull scenario and $113 under the worst-case scenario. The firm currently has an “Overweight” rating on the semiconductor company’s stock.
Several other analysts have also recently commented on the stock. Rosenblatt Securities raised the price target to $175 from $155. UBS upped the price objective to $155 from $125. Bernstein increased the target price to $185 from $175. Qualcomm had its price target hoisted by Raymond James to $190 from $150. The brokerage currently has a strong-buy rating on the wireless technology company’s stock.
In addition, Cowen upped their price objective to $180 from $170 and gave the stock an outperform rating. Piper Sandler upped their price objective to $150 from $140 and gave the stock a neutral rating.
“We see an improvement in smartphone demand in 2021 after declining 5% in 2020 due to COVID-19. We also see 5G adding greater dollar content and supporting industry-wide handset volume growth. Qualcomm’s (QCOM) leadership in cellular technologies (3G/4G/5G) puts the company in a favourable position to maintain leading market share,” said Joseph Moore, equity analyst at Morgan Stanley.
“The potential elimination of a major competitor in the Chinese market, HiSilicon, should benefit QCOM as Huawei currently does not pay royalties. To the extent competitors that do pay royalties are able to pick up market share, that would be beneficial for QCOM.”
Widepoint is an IT company with products, services, and solutions for commercial companies, federal and state governments. WYY has long-term government contracts. What can be better? The market cap is only $ 73 million. However, the company has the potential to add $500 million in revenue. Another good thing for investors Widepoint is debt-free. But, there are some minuses also. The main risk for investors is significant insider selling over the last 3 months. PEG ratio is 1.3.
Franklin Wireless (FKWL) analysis
The company provides intelligent wireless solutions. Its products include mobile hotspots, routers, trackers, and other devices. It integrates hardware and software enabling machine-to-machine (M2M) applications and the Internet of Things (IoT). In other words, a company is a player in a wide range of markets, not only 5G. Recently FKWL announced Pintrac Drive, an aftermarket On-Board Diagnostic (OBDII) device that enables non-connected cars to connect to global 4G LTE networks for enhanced services and broadband wireless connectivity. It allows smart tracking of vehicles on the road.
The market cap of this company is only $250 million. By the way, Franklin Wireless announced recently the collaboration with Qualcomm. Also, the company partners with Patron for the 5G business and technology solutions to the world-wide market. FKWL reports a 160% increase in revenue to $75 million. At the same time operating expenses declined over 5% to $7.4 million. The company increased its research and development expenses by 27% vs last year. It is a very good sign for long-term investors. The company is trying to take leading positions in innovations. As you see Franklin Wireless is very strong and has big potential growth. PEG ratio is 0.7.
However, there is significant insider selling over the past 3 months. It is the main risk for this stock.
Qualcomm (QCOM) analysis
Qualcomm is the major 5G player. It is a semiconductor supplier that also collects royalties on its wireless technology patents. Apple recently announced all of its 5G iPhone 12 models will support millimeter-wave capabilities. Qualcomm is the only RF vendor that has millimeter-wave solutions shipping at large volumes. Most developed global economies are expected to deploy millimeter wave spectrum by the end of 2021. The company pays dividends at 1.66%. There are also few risks when it comes to investing in QCOM. The PEG ratio is very high – 3.4. Besides, the company has a high level of debt.
5G industry has a big potential in the long-term perspective. However, there are a number of risks in this sector.
However, Wall Street forecasts the company’s revenue to grow about 12% to $1.58 billion.
“Q4 estimates for Vertex‘s CF franchise appear achievable based on recent trends. With industry-leading growth and its fundamentals largely intact despite COVID-19, we expect the current dislocation between Vertex Pharmaceuticals’ (VRTX) trading price and the value of its CF franchise to be only temporary. We would use the recent stock weakness to build a position,” said equity analysts at Cowen and Company, who also gave a price target of $300.
NXP SEMICONDUCTORS: Eindhoven, Netherlands-based semiconductor manufacturer will post earnings of $2.11 per share in the December quarter on revenue of $2.46 billion, up from $1.98 per share on revenue of $2.30 billion same quarter last year. For the December quarter, the forecasts revenue in the range of $2.375-$2.525 billion which, at the midpoint, represents growth of 8% sequentially and 6% year-over-year.
“Management remains upbeat about near-term demand, including 2021, especially regarding its mobile chip business as the firm’s ultra-wideband connectivity solutions are rapidly gaining adoption within newer smartphones. We raise our fair value estimate to $150 from $130, and with shares trading around $134, we view shares as slightly undervalued,” said equity analysts at Cowen and Company.
IN THE SPOTLIGHT: PFIZER, ALIBABA, AMAZON, ALPHABET
PFIZER: The world’s largest pharmaceutical giant is expected to report a profit of $0.52 in the fourth quarter, which represents a year-over-year decline of about 5.4% from the same quarter last year when the company reported $0.55 per share.
“We lowered our 4Qe revenue by 5% from $11.6B to $11.0B and EPS by 6% from $0.40 to $0.38 to reflect lower doses delivered in 4Q. We lowered our 4Q COVID vaccine revenues from $683M to $150M (assuming $19.50/dose). Our prior model assumed 35M doses, which we lowered to 7.7M doses based upon CDC distribution allocations,” said David Risinger, equity analyst at Morgan Stanley.
“Our 4Q projections are well below consensus, but we do not see 4Q results as a stock driver given all of the confounding factors. We are instead focused on management’s 2021 targets.”
The Chinese multinational technology company has surpassed consensus estimates with an average of about 25% in all four previous quarters.
“We expect healthy GMV growth of 16% to drive core of core revenue growth of 18% on better monetization, but slower adjusted EBITA growth of 11% due to continued investment in new initiatives. Stay Overweight on F2022e non-GAAP P/E of 19x; lower price target to $320,” said Gary Yu, equity analyst at Morgan Stanley.
“We forecast total revenue of Rmb216bn (+33.8% YoY, +39.3% QoQ), non-GAAP EBITA of Rmb61.5bn (+21.4% YoY, +49.2% QoQ) with margin at 28.5% and non-GAAP net profit of Rmb57.2bn (+17.7% YoY, +16.1% QoQ) with margin at 26.5%.”
The Seattle, Washington-based multinational technology giant will report revenue of $120.4 billion, up over 37% from the year-ago quarter. The company expects net sales between $112- $121 billion during the quarter.
“Amazon‘s high-margin businesses continue to allow Amazon to drive greater profitability while still continuing to invest (last-mile delivery, fulfilment, Prime Now, Fresh, Prime digital content, Alexa/Echo, India, AWS, etc),” noted Brian Nowak, equity analyst at Morgan Stanley.
“Amazon Prime membership growth drives recurring revenue and a positive mix shift. Cloud adoption hitting an inflection point. Advertising serves as a key area for both further growth potential and profitability flow-through.”
QUALCOMM: San Diego, California-based multinational corporation that creates an intellectual property, semiconductors, software, and services related to wireless technology is expected to report a profit of $2.10 in the fiscal first quarter, which represents year-over-year growth of over 110% from the same quarter last year when the company reported $0.99 per share.
The semiconductor company will report revenue of $80.3 billion, up over 60% from the year-ago quarter.
“We see an improvement in smartphone demand in 2021 after declining 5% in 2020 due to COVID-19. We also see 5G adding greater dollar content and supporting industry-wide handset volume growth. Qualcomm’s (QCOM) leadership in cellular technologies (3G/4G/5G) puts the company in a favourable position to maintain leading market share,” wrote Joseph Moore, equity analyst at Morgan Stanley.
“The potential elimination of a major competitor in the Chinese market, HiSilicon, should benefit QCOM as Huawei currently does not pay royalties. To the extent competitors that do pay royalties are able to pick up market share, that would be beneficial for QCOM.”
US data announced this week showed a significant recovery in building permits and housing, building permits (MoM) for July surged to 18.8% compared to the previous 3.5%, Housing Starts data revealed 22.6% which is 5.1% higher than the previous month, existing-home sales data were as well positive reported beyond expectations.
Despite the negative Jobless claims and Philadelphia Fed Manufacturing PMI reported on August 20, Manufacturing PMI and Services PMI demonstrated a significant improvement, which led major US Indices to surge whereas S&P500 and Nasdaq100 reached the all-time high.
US stocks continue hitting records, Tesla surged by 24.19% breaking the significant $2000 per share value, and is now worth more than $382 billion surpassing Walmart by nearly $10B. Nasdaq’s top company by market cap – Apple gained 8.23% hitting the $2127B in capitalization. Tesla and Apple remain the top popular shares last week based on Robinhood data.
S&P500 closed above the all-time high, some might think that there is a possible double top pattern, economic recovery of the US indicates that the index may continue the run towards $3500.
Nasdaq owes its gains not only to Tesla and Apple, but there are also other tech companies that surged last week and during the pandemic, such as NVIDIA, AMD, Qualcomm, Microchip Tech, Texas Instruments.
An hourly chart demonstrates that the correction is most likely will happen as the price touched the dynamic resistance and the fifth wave of an ending diagonal is about to complete at 11600. Ending diagonal is a trend reversal pattern, which usually demonstrates exhaustion of bulls, note the evening star doji, though the closing is above the previous close, it still shows uncertainty and exhaustion.
How is it related to cryptocurrencies and Bitcoin?
Bitcoin and Ethereum price actions are considered as cryptocurrency market movers. Since Bitcoin is nowadays considered as the digital Gold and Ethereum as a digital Silver, their price action now is correlated to US data which effect Gold. Gold was ever since used as a safe-haven to hedge funds during the uncertain times and inflation, so is Bitcoin now.
An hourly chart of Bitcoin indicates that the price could decline further to towards $11200 – $11160 to complete the Head and Shoulders pattern, another pattern to watch is an ending diagonal which is yet to be completed as well. Bitcoin remains below the major resistance level of $11700 an in order to show another bull run it must break the dynamic resistance (ending diagonals upper edge) and close above the 11700, however testing 11200 might bring another stimulus for bulls.
Ethereum plummeted to $380 after reaching the year’s maximum at $446.67, loosing 9.7% this week only. Digital Silver price is following a similar ending diagonal pattern, and if the upper dynamic resistance and a static resistance of 397 is not overpassed, ETH might continue the drop towards a major support at $380, and if that support is broken, towards $370 – 369.
Unlike Bitcoin, Gold lost only 0.20% in price for the week. A significant drop was on Wednesday August 19 ahead of US data announcements, where the precious metal lost 3.67% after gaining 2.97% on Monday and Tuesday.
Head and shoulders pattern is identified on an hourly chart of Gold and the price might continue the drop down to $1881.60 – 1880, where if the support laid on those level withheld the price might retrace towards 2014 and if above towards 2046, where the bearish pattern will be completed.
Since Gold and Silver prices demonstrate similarities in their price action, the same Head and Shoulders is visible on an hourly chart of XAGUSD. The price is below the dynamic support of August 12 which might signal to a further decline down to $25.30.
The price continues the short-term downtrend move inside a descending channel, which in other had forms another controversial to the H&S pattern of Bullish Flag.
If bulls are able to push the price above the dynamic support and if the dynamic resistance is overtaken at $27, the bullish run might proceed towards $28 – 28.50.
Key takeaways for the upcoming week would be announcements from Eurozone, Great Britain, China and the US.
Important announcements to watch:
Tuesday, August 25, 2020
German GDP (YoY) as per Second quarter data is expected to be -11.7%, 9.8% lower than the previous -1.9%
German GDP (QoQ) as per Second quarter data is expected to be -10.1%, 7.9% lower than the previous -2.2
US CB Consumer Confidence (August) is expected to be 93, 0.4 points higher than the previous 92.6
US New Home Sales (July) is expected to be 786K, 10K higher than the previous 776K
Wednesday, August 26, 2020
US Core Durable Orders is expected to be 2.1%, 1.5% lower than the previous 3.6%
Thursday, August 27, 2020
US GDP (QoQ) as per 2nd Quarter is expected to be -32.6%, 0.3% higher than the previous -32.9%
US Initial Jobless Claims is expected to be 1,000K, 106K lower than the previous 1,106K
US Pending Home Sales (MoM) as per July is expected to be 4.5%, 12.1% points higher than the previous 16.6%
Asides from the data to be announced, there are other important events to trace.
Republican National Convention, which will be held on Monday, in which delegates will determine the nominees for the upcoming presidential elections. Markets will be watching this event closely as during the current campaign Democrats are having an edge over republicans.
Another major event would be an annual Jackson Hole conference this Thursday, August 27, where FED Chairman Jerome Powell will speak about current economic situation, inflation targets and possibly share preliminary focus on interest rate change.
The economic state and inflation in the US once again are an important constituent of the Global economy and global markets, all these events will be decisive for the mid-term price movements for the US Indices, commodities and cryptocurrencies.
Qualcomm Inc, a multinational semiconductor and telecommunications equipment company, is lobbying the United States government to roll back restrictions on the sale of advance components to Huawei Technologies Co. after the Commerce Department blacklisted the Chinese telecom giant, according to The Wall Street Journal report.
The Chipmaker is lobbying to sell chips to Huawei that the Chinese company would include in its 5G phones. With those restrictions, the U.S. has handed Qualcomm’s foreign competitors a market worth as much as $8 billion annually, the company said in the presentation, the WSJ said.
“We are very positive about Qualcomm’s competitive positioning and the strength of 5G, which is continuing its rollout globally. We raise our target price to $130, 20x our FY21E as the company continues to overachieve expectations. Our rating and target price assume that the S&P 500 remains unchanged over the next 12 months,” said Louis Miscioscia, equity analyst at Daiwa Capital Markets America.
Qualcomm stock forecast
Twenty-one analysts forecast the average price in 12 months at $115.12 with a high forecast of $137.00 and a low forecast of $90.00. The average price target represents a 6.35% increase from the last price of $108.25. From those 21, 13 analysts rated ‘Buy’, seven analysts rated ‘Hold’ and one rated ‘Sell’, according to Tipranks.
Morgan Stanley target price is $121 with a high of $139 under a bull scenario and $58 under the worst-case scenario. Qualcomm had its price target lifted by Royal Bank of Canada to $106 from $81. They currently have a sector perform rating on the wireless technology company’s stock.
Several other equity analysts have also updated their stock outlook. Deutsche Bank lifted their price target to $115 from $100 and gave the stock a buy rating. Canaccord Genuity lifted their price target to $115 from $102 and gave the stock a buy rating.
We think it is good to buy at the current level and target at least $115 as 100-day Moving Average and 100-200-day MACD Oscillator signal a strong buying opportunity.
“We see an improvement in smartphone demand in 2H20 after bottoming 1H20 due to Covid-19. We also see 5G adding greater dollar content and supporting industry-wide handset volume growth. QCOM’s leadership in cellular technologies (3G/4G/5G) puts the company in a favourable position to maintain leading market share,” said Joseph Moore, equity analyst at Morgan Stanley.
“The potential elimination of a major competitor in the Chinese market, HiSilicon, should benefit QCOM as Huawei currently does not pay royalties. To the extent competitors that do pay royalties are able to pick up market share, that would be beneficial for QCOM,” the analyst added.