Stocks of Qualcomm rose 12.1% based on information from S&P Global Market Intelligence august. The device that is mobile’s August results were all the more remarkable considering that the stock had currently increased 15.8% in July.
Qualcomm released earnings that are positive July 30 with beat analyst expectations, and also announced a certification that is unique with Chinese smartphone giant Huawei on its earnings call. However, Qualcomm received much more news that is good a court battle in August, and positive analyst belief continued to pour in.
In very early August, Qualcomm won an appeal in federal court, which overturned a 2019 ruling from the suit brought by the Federal Trade Commission. The FTC had advocated Qualcomm renegotiate smartphone vendors to its licensing discounts, which many Qualcomm clients have resisted as unreasonably high. A license cost on the basis of the price of the phone, which should theoretically gain Qualcomm into the 5G age, as 5G phones could have higher prices than 4G by throwing out last year’s ruling, Qualcomm can continue its practice of charging smartphone vendors. In conjunction with Huawei’s caving on finally paying Qualcomm permit fees, the court that is good solidifying Qualcomm’s business model sent shares further up during August. In addition, one analyst postulated that Qualcomm and other semiconductor that is large would be rerated greater as investment dollars came out of Intel (NASDAQ:INTC) due to its recently disclosed issues producing 7nm chips.
Qualcomm is acutely well-positioned in the era that is 5G not only due to its leading phone modems, but in addition because 5G may enable more fixed wireless broadband modems that would also utilize Qualcomm 5G potato potato chips. There’s a headwind that is potential the term that is near however, as the U.S. government has imposed stricter restrictions on sales of any U.S. made chip to Huawei; however, many analysts believe that Qualcomm will at least be able to get an export license enabling the company to produce Huawei with mobile chip sets going forward.
Overall, Qualcomm nevertheless looks such being a bet that is solid benefit from 5G over the following ten years, although investors should get ready to get more court challenges to its monopoly-like position over wireless technology, as well as U.S.-China trade war headwinds across the way. Overall, I nevertheless think the positives outweigh the negatives for Qualcomm in the years ahead. Stocks of Qualcomm rose 12.1% based on information from S&P.