Qualcomm’s (QCOM) stock continues to be in pain as investors are pulling out of technology stocks, especially semiconductors as fears of an oversupply of memory plus threats of a trade war with China are making the market less desirable.
Charter analyst Edward Snyder called QCOM’s last quarter conference call an indication for what he believes will be a “nasty affair” for this quarter’s call as the company will need to address bearish sentiment across the board on semiconductor stocks. Now, the company is in a poor position, trying to market its 5G technology to vendors who have moved on. In response, Snyder reiterates a Market Perform rating for the stock. (To watch Snyder’s track record, click here)
“Having lost Apple, Huawei and much of Samsung, it’s [QCOM] now left fighting for what can be had at Oppo, Vivo and Xiaomi and 3rd tier manufacturers that don’t generate enough combined volume to keep QCT in business. And unlike the small captured OEMs, Oppo, Vivo and Xiaomi have long-standing relationships with MediaTek and flit between them and Qualcomm to suit their needs. This makes it highly unlikely they can be compelled to use Qualcomm’s 5G solution, much less its fledgling RF offering, especially given their lack of urgency for in deploying the next standard. With no network in China, ratification of the standard still a year away and most of the LTE Advanced and all the LTE Pro upgrades still to work through, we don’t believe Chinese OEMs are as hot for 5G as Qualcomm’s press releases would suggest. On the contrary, it appears the atrophy of its core businesses, the collapse of the NXP deal, and the hockey-stick forecasts it laid out during the Broadcom fight have left Qualcomm in greater need of 5G than its customers,” Snyder said.
Analysts who have their eye on QCOM are split even when it comes to rating the stock. TipRanks found out of 18 analyst reviews, 9 are bullish and 9 are sidelined. The consensus price target of $69.57 shows just about a 21% upside from where the stock is currently trading. (See QCOM’s price targets and analyst ratings on TipRanks)