What Happened: Shares of wireless chipmaker Qualcomm (NASDAQ:QCOM) jumped 9.29% in the pre-market session after the company announced an agreement with Apple (NASDAQ:AAPL) 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. After the initial pop the shares cooled down to $109.43, up 3.1% from previous close.
Is now the time to buy Qualcomm? Find out by reading the original article on StockStory.
What is the market telling us: Qualcomm's shares are somewhat volatile and over the last year have had 13 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was four days ago, when the company dropped 6.06% on the news that stocks of chipmakers and other suppliers of components used to make Apple devices retreated amid recent reports suggesting China's intention to expand its prohibition of Apple device usage from government officials to state and federal agencies. For example, Qualcomm supplies some of the chips used in iPhones.This development has raised concerns among investors about the potential implications of the ban on the iPhone production supply chain and future demand from China, as the extent of these restrictions remains uncertain.
Qualcomm is up 2.09% since the beginning of the year, but at $109.43 per share it is still trading 21% below its 52-week high of $138.46 from January 2023. Investors who bought $1,000 worth of Qualcomm's shares 5 years ago would now be looking at an investment worth $1,510.