Out of the semiconductor group, Qualcomm was one of Wells Fargo’s top picks for 2015. The analyst firm believes that Qualcomm is not fully appreciated by investors for its leadership position in 4G communications chip technology. However, there are some legal and regulatory disputes at the moment that do carry some risk and uncertainty with the stock. Wells Fargo is optimistic that there will be a positive resolution to Qualcomm’s issues in China, and it further believes that this could prove to be a positive catalyst to the stock and a source of potential EPS upside at various points over the next one to three years.
Qualcomm is the largest manufacturer of wireless semiconductors globally. The company is not only a top stock to buy at UBS, but many of the firms we cover on Wall Street are very positive on the stock. In addition to adding to its business with Apple for the iPhone 6, Qualcomm is making a huge move into bringing sophisticated LTE connectivity to the automobile industry. The company is looking to employ a peer-to-peer (or car-to-car) communication technology that runs on Wi-Fi and is said to warn of possible collisions much better than radar technology. Note that some headline issues, notably the loss of some Samsung business, have hung over the stock and given investors a very solid entry point.
The company saw its short interest fall to 17.7 million shares, with 1.7 days to cover, from to the previous period, which had 18.1 million shares short, with 2.2 days to cover.
Analysts have recently viewed Qualcomm as favorable. S&P Equity Research reiterated a Strong Buy rating for Qualcomm earlier in the month and FBR Capital Markets reiterated a Buy rating as well.
The 50-day moving average is $72.62 and is currently being tested after it crossed over shares in mid-January. The 200-day moving average has been holding above and is at $75.30.
Shares of Qualcomm were up about 0.5% at $72.17 Tuesday morning. The stock has a consensus analyst price target of $79.53 and a 52-week trading range of $67.67 to $81.97.
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