Is Qualcomm Stock A Good Buy Right Now? (QCOM)
Qualcomm is a U.S chipmaker that has performed well in the past 12 months. This Thursday we saw Qualcomm announce its stock buy back plans to investors. The company said it will buy back around $16 billion of its common stock, as part of its overall buy back plan. In total, Qualcomm is said to buy back $30 billion of its own stock.
Qualcomm is also looking to compensate its investors for the failed acquisition of NXP Semiconductors in July. The acquisition was priced at $44 billion but fell through due to Chinese competitors. This acquisition was likely to have increased the Qualcomm stock price.
Qualcomm’s board has announced that the CEO, Steve Mollenkopf, has showed great leadership since working the QCOM. The company will be issuing a bigger pay package for Mollenkopf due to his work for the Qualcomm.
The larger pay package is attributed to Mollenkopf’s progress with his team when facing issues over the past few years. The issues that Qualcomm has faced in the past few years have been relentless.
Whilst Mollenkopf has been at Qualcomm, the company has been facing problems on all fronts. Firstly, Apple has stopped working with Qualcomm’s chips. Apple has also stopped paying Qualcomm licensing fees and even took the company to court. The legal battle between Apple and Qualcomm was long lasting and was costly for both sides. Regulatory agencies across the globe took legal action against Qualcomm. QCOM avoided a hostile takeover Broadcom Inc, finishing with a failed NXP Semiconductors acquisition.
The reasoning behind the Apple Vs Qualcomm legal battle was due to Apple claiming Qualcomm abuses its “monopoly power” over the wireless modem sector and demands higher royalties than it should be receiving. The lawsuit also says that Qualcomm withheld nearly $1 billion in rebates after Apple participated in a South Korean antitrust investigation.
It seems like Qualcomm is over the worst of their troubles, with Taiwan’s regulatory legal action being reversed. Samsung has since signed a long-term deal with Qualcomm to pay licensing fees. Another Qualcomm partner, Huawei Technologies has also settled their dispute with QCOM.
Once the acquisition of NXP fell through, Qualcomm decided to spend their cash pile on stock buy back’s. This year Qualcomm stock has been up by 15%.
Qualcomm Future Prediction
On the tech side of things, Qualcomm boasts the Snapdragon 1000 (Snapdragon 8180). This new processor is vastly more capable than any other mobile chip. Apple’s latest A12 Bionic chip has significantly less transistors that the Snapdragon 1000.
QCOM seems to have overcome its worst troubles, with its new chips leading the market. This means that in the next few months we can expect to see an increase in QCOM share price and an increase in growth. Competition in the mobile chip sector is fierce, with Apple being on QCOM’s heels.
In the near future we will see the outcome of Apple and Qualcomm’s legal battle, with Qualcomm’s CEO saying he sees a “settlement on the horizon”.
Qualcomm Stock Prediction
Qualcomm stock is up 15% this year, which is a great sign for investors. Another good indication for the stock is the CEO pay package increase. To make the Qualcomm stock even more attractive to investors is the company’s stock buy back plans.
QCOM stock has a one year forecast of $89.43. In this quarterly report, it is predicted that QCOM’s earning per share will be at $0.82.