Qualcomm in spotlight on back of Wolfe Research downgrade

Qualcomm (NASDAQ:QCOM) was in the spotlight on Monday as Wolfe Research downgraded the semiconductor company for a variety of reasons, including worries about its Apple (AAPL) business.
Shares fell 1.2% in premarket trading.
There are real fears now that Apple’s work to create an internal modem will have an impact, analyst Chris Caso said. Even though the stock is not expensive at 15 times earnings, any loss of Apple-related revenue is a headwind that is not fully in analyst estimates, Casio said. Caso cut his rating on Qualcomm to Peer Perform from Outperform.
In September, Apple and Qualcomm announced an extension of their previous deal that will last until 2026. Qualcomm will supply Snapdragon 5G Modem‑RF Systems for Apple’s smartphone launches.
In addition, Caso said that the boost Qualcomm received from the premium part of the Android market has now normalized and that any growth it has seen in its internet of things business, which could be a focus at the company’s analyst day in November, are “tougher” sells to investors.
Analysts are largely bullish on Qualcomm (QCOM). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha’s quant system, which consistently beats the market, rates QCOM a HOLD.

Tags: AAPL