The last 3-6 months have seen the Qualcomm stock (NASDAQ:QCOM) oscillate between $52 and $59. Amidst the general highs of tech stocks and the personal specific lows of Qualcomm, with multiple law suits on one hand and its NXP acquisition taking time to materialize, on the other, the stock has seen some inconsistent times off late.
Market Reaction to Qualcomm
Investor and trader sentiment has been noticeably shaky. While the industry is doing well and Qualcomm’s business is generally robust, patent related lawsuits from Apple and other major players have managed to dent the stock sentiment.
The Wall St opinion is also trending low with Confidence Meter for Qualcomm at 38%. Contrast this with the trends in other industry stocks like AVGO and NVDA where Confidence Meter is 68% and 67% respectively.
Lawsuits, an Acquisition and Revenue Outlook
Qualcomm and Apple are embroiled in multiple lawsuits in relation to Apple’s hiring of Esin Terzioglu, Qualcomm’s baseband expert and Apple, the US Govt and Samsung coming together against Qualcomm the company’s purported “anti-competitive business practices“.
Running in parallel with this quagmire is the long-drawn process of Qualcomm attempting to acquire NXP Semiconductors. While the NXP stock has steadily climbed 5% over the last 2 months, its Confidence Meter is at a lowly 27%. With the $110 offer from Qualcomm not going down well with NXP’s investors, it remains to be seen how much more money – from the $45bn current offer – QCOM will end up spending on this deal.
On account of the lawsuits and pressure on pricing, Qualcomm has already had to reduce it’s earnings guidance once and it looks like estimates for next quarter are also pointing downwards. It will be interesting to see how the stock behaves as we get closer to the next earnings announcement.
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