QUALCOMM, Inc. (QCOM) — This San Diego-based company is a household name in the semiconductor industry. It is known as a leader in 3G and next-generation mobile technologies in China, South Korea, Taiwan and the United States.
Recently reported fiscal fourth-quarter results fell short of Wall Street’s expectations largely due to troubles in China. But the company has grown earnings and revenue in each of the past five years and is expected to continue to do so.
S&P Capital IQ expects operating earnings per share (EPS) to jump 20% in fiscal 2015 (ending in September) on an 8% to 9% increase in revenue. For fiscal 2016, its analysts estimate 8% earnings growth to $5.70 per share on sales growth in the upper single digits.
Although they expressed concern about the timing and rollout of QUALCOMM’s next-generation networks in China due to licensing issues, they expect solid chipset sales throughout 2015. They also highlighted the popularity of the company’s Snapdragon chipset and royalties as emerging markets convert from 2G to 3G and 4GLTE technology. On Nov. 20, Capital IQ reiterated its “strong buy” rating on QCOM stock and $82 price target.
Shares fell sharply in early November on the quarterly earnings miss. But what appears to have been a high-volume selling climax on Nov. 6 was followed by strong buying.
The selling opened a gap from $71.07 to $76.42, and QCOM stock is now in the process of closing that gap. However, its 50-day moving average at $73.41 is a major obstacle.
Technically QCOM stock is in a bullish short-term rebound. Assuming that the 50-day is overcome, the trading target is the resistance zone at $78 to $82. Buy QCOM stock at the market with a stop-loss order at $68.
