Like the third party in a bad marriage, Intel (NASDAQ:INTC) is finding its stock the victim in the escalating fight between Qualcomm (NASDAQ:QCOM) and Apple (NASDAQ:AAPL) over intellectual property. This week, Qualcomm, which has been fighting Apple’s attempts to lower its patent bill to it for years, amended its allegations against Apple, which ended up placing Intel stock in the crosshairs of bearish investors.

Specifically, QCOM accuses Apple of stealing modem trade secrets and giving them to Intel, which has become Apple’s alternate supplier of iPhone modems.

The suit, originally filed last year, may have been what made Broadcom (NASDAQ:AVGO) try to buy out Qualcomm. Now that Broadcom has been sent packing on national security grounds, the main event has resumed with a bang.

Qualcomm hopes to make a lot of money on this and secure its virtual monopoly on cellular modem technology in the process. Can you make money from it?

The State of Play for Intel Stock

Since Broadcom left the scene, as well as NXPI (NASDAQ:NXPI), which Qualcomm tried to buy to fend off Broadcom, Qualcomm stock has been on fire. Shares that traded below $50 in late April opened Sept. 26 at over $73, even though Qualcomm will be hard-pressed to match last year’s $22.3 billion in revenue for the year. The market cap is now almost $107 billion, about five times revenue.

Apple, meanwhile, is worth $1.07 trillion, up 29% for the year on the growing strength of its cloud-based services business, the continued strength of the iPhone and hopes for the Apple Watch in healthcare. But that’s still just four times current year revenue.

Apple can afford the roughly $5.90 per iPhone Qualcomm has been seeking, as well as over $8 billion now held in escrow. What it doesn’t want is to be charged the same price as other, smaller phone makers for access to Qualcomm patents. Intel has been its leverage in that fight.

Meanwhile, Intel stock has gone nowhere this year and it had a pre-market opening market cap of $211 billion, just 3.4 times revenue. INTC is by far the weakest player. Its vaunted manufacturing capability remains troubled, with Raymond James recently downgrading it on production concerns.

Getting knocked out of the communication business by Qualcomm, in addition to its leadership crisis — it hasn’t had a permanent CEO since June — could lead to the company’s sale or breakup. Intel stock is already selling for less than 17 times its annual earnings and a 26% discount to its May price.

Did They Do It?

Qualcomm’s new case is based on discovery from the earlier suits. It does not offer absolute proof, pointing instead to emails between Apple and Intel engineers, Apple’s source code development history and the code used in INTC’s modems. 

The case, in short, is circumstantial, designed to force Apple back to the negotiating table. Should Apple give in, the check it would write could be as big as Qualcomm’s revenues for the year so far.

More important, it would bring an admission by Apple of its actions on behalf of INTC, which could then lead to a new lawsuit aimed at kicking Intel out of the modem business entirely, or at least making it a non-factor.

The Bottom Line

Of the three combatants, Qualcomm stock has the most expensive stock, but stands to benefit enormously from either a settlement or a legal victory. The company’s 62 cent per share dividend will pay you 3.41% to wait on that result.

On the other hand, Intel stock is highly vulnerable, and while it is cheap, with a 30 cent per share dividend yielding 2.4%, I’m getting tired of waiting for the company to get its act together. Very few speculators are shorting INTC stock now but that could change.

As for Apple stock, only a complete legal defeat, in both U.S. and international courts, could do it serious damage. The Qualcomm suit remains irrelevant to its investment thesis.

Dana Blankenhorn is a financial and technology journalist. He is the author of a new mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing, he did not hold a position in any of the aforementioned securities.