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QCOM Stock Up 1%, Qualcomm Received Buy Ratings Despite Shrinking Market Share in China

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by Steve Muchoki · 2 min read
QCOM Stock Up 1%, Qualcomm Received Buy Ratings Despite Shrinking Market Share in China
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Qualcomm’s market share in China fell to 25.4% in 2020 versus 37.9% in 2019.

The stock of American giant chipmaker Qualcomm Inc (NASDAQ: QCOM) was trading around $166.84, up 1.36% during Thursday’s pre-market. QCOM stocks had closed yesterday trading at $164.60, after adding approximately 0.51% during the day.

The upward volatility is primarily attributed to the huge demand for electronics amid the coronavirus crisis. As more people shift to remote learning and working, there has been a notable increase in affordable smartphones and laptops.

As a result, Qualcomm stock has received positive ratings from different market analysts based on the market prospects. However, there is a major impediment that the company has been dealing with, Huawei’s on the United States blacklist. Apparently, Qualcomm was a major supplier of chips to giant smartphone maker Huawei, but the latter has shifted to other sources since Trump‘s executive order.

Qualcomm stocks rallied approximately 78% last year, and they are now up approximately 28.21% in the past three months according to MarketWatch. According to research by MarketWatch, Qualcomm stocks received an average of Over rating from 29 ratings in the recent past.

Qualcomm Stock and Company’s Performance

Investors and analysts are waiting for the February 3, earnings results to be released. The results are expected to guide investors in the coming quarters as the market recovers from the ongoing coronavirus pandemic.

It is expected that Qualcomm will report earnings per share of $2.10, which would, in turn, represent a year-over-year increase of 112.12%. Further, analysts expect the company to report revenue of $8.30 billion, up approximately 63.46% from the same time in the prior year.

On a full-year basis, Zacks Consensus Estimates suggest analysts are expecting earnings per share of $7.19 from a revenue of $30.72 billion. Overall, the Zacks rating system gave Qualcomm stocks a buy rating. Besides, Qualcomm stocks saw their rating jump from 94 to 97 according to the IBD SmartSelect Composite Rating. Notably, this is viewed as a buy call with respect to the rating.

Qualcomm is reported to rank position 6 among its peers in the Electronics-Semiconductor Fabless industry group. Inphi (IPHI), Monolithic Power Systems (MPWR), and Advanced Micro Devices (AMD) are among the top 5 highly-rated stocks within the group.

Qualcomm will have to seek other global market shares to put up with the increased competition in the chip-making industry. This is primarily because its shipments in China shrank 48.1% year-on-year according to a research by CINNO. Notably, Qualcomm’s market share in China fell to 25.4% in 2020 versus 37.9% in 2019.

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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