Qualcomm (QCOM) Stock Trades Up, Here Is Why
What Happened:
Shares of wireless chipmaker Qualcomm (NASDAQ:QCOM) jumped 10% in the morning session after the company reported first quarter results that exceeded analysts' EPS expectations. Next quarter's revenue guidance came in higher than Wall Street's estimates. On the other hand, its inventory levels increased. Overall, this quarter's results seemed fairly positive and shareholders should feel optimistic.
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What is the market telling us:
Qualcomm's shares are quite volatile and over the last year have had 6 moves greater than 5%. But moves this big are very rare even for Qualcomm and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 8 months ago, when the stock gained 9.3% on the news that the company announced an agreement with Apple to provide Snapdragon® 5G Modem-RF Systems for smartphone releases in 2024, 2025, and 2026. Qualcomm is the leading supplier of 5G modems, and this deal with Apple further cements its position in the market. Analysts have been concerned that Apple might be increasingly moving towards in-house production of some of its chipsets, which could have hurt Qualcomm's business. However, this deal shows that Apple is still committed to using Qualcomm's modems, which is a positive sign for investors.
Qualcomm is up 26.8% since the beginning of the year. Investors who bought $1,000 worth of Qualcomm's shares 5 years ago would now be looking at an investment worth $2,041.
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