Semiconductor and wireless technology manufacturer Qualcomm (NASDAQ:QCOM) stockholders have ridden out a number of peaks and valleys over the past six years. And QCOM CEO Steve Mollenkopf has been right there with them through the company’s ups and downs since he took the position in 2014.
One of the biggest roadblocks to Qualcomm’s success was a tussle with none other than the U.S. Federal Trade Commission (FTC). And when a company has issues with the government, that’s enough to scare some investors away.
Folks who stayed the course with QCOM stock, however, were eventually rewarded for their persistence. That’s why it’s so important to invest in great companies. A lesser company might have folded under the pressure of an FTC lawsuit.
Today, the company is stronger than ever and preparing for bigger and better things. It’s a testament to Mollenkopf’s unyielding vision for a 5G company with a track record of overcoming challenges.
QCOM Stock at a Glance
Semiconductor and 5G companies might have a reputation for being overvalued. Yet an argument could be made that QCOM is reasonably priced and has plenty of room to go higher.
Think about it this way. QCOM stock effectively went nowhere from late 2015 to March of this year. So it’s not as if the stock has been going up like a rocket over the past five years.
It’s also worth noting that patient investors still did just fine during those years. That’s because QCOM offers a pretty good dividend for a tech company. In fact, QCOM’s forward annual dividend yield is 2.13%.
Looking at QCOM stock’s more recent price action, it’s safe to say that the bulls are firmly in control. Attempting to short-sell QCOM would be akin to standing in front of a steamroller. It’s definitely not recommended. And, don’t be surprised if the $150 level is broken through in the near future.
The Power of Optimism
In dealing with Qualcomm’s challenges, Mollenkopf pinpointed one trait that all leaders ought to have during these difficult times:
“The thing that is really important for CEOs—and it is absolutely a trait of tech CEOs, by and large—is that you just have optimism. If you didn’t have that, you wouldn’t be in the industry.”
There’s an important life lesson in that quote. Without a doubt, optimism was needed when the FTC sued Qualcomm in 2017, claiming that the chipmaker collected royalties from some of its patents in an anticompetitive manner.
If you were trading QCOM stock at the time, you might recall the deeply negative sentiment and the doomsday predictions. In reality, that was a great time to start accumulating QCOM shares.
As it turned out, the U.S. Court of Appeals for the Ninth Circuit of the Northern District of California ruled entirely in Qualcomm’s favor, finding that Qualcomm’s “patent-licensing royalties and ‘no license, no chips’ policy” weren’t anticompetitive as alleged and “did not undermine competition in the relevant markers.”
Making Opportunity out of Stress
Another life lesson came from Mollenkopf’s commitment to making the most out of what he calls “opportunistic stress.” The Covid-19 pandemic would certainly count as a source of stress, and Qualcomm is indeed finding an opportunity to thrive during this time.
In particular, Mollenkopf points to the rapid expansion of the 5G connectivity network in China. He notes that this expansion has accelerated since the onset of Covid-19.
As Mollenkopf envisions it, upcoming “releases of the 5G standard are positioned for use outside of cellular networks.” Clearly, the implication is that Qualcomm will be at the forefront of this network-independent movement.
Going forward, Qualcomm’s CEO sees a “big bounceback” as the tech domain, and the world generally, recovers from the pandemic. He’s not just watching the wireless revolution happen in China, Europe and the U.S. He’s making sure that Qualcomm is participating and, of course, innovating.
The Takeaway
Mollenkopf’s visionary leadership isn’t the only reason to own QCOM stock, but it’s a big one. He helped steer Qualcomm through its toughest times, and now the shareholders can enjoy the better times.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
