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Qualcomm stock plunges 10.28 percent

Company's Snapdragon 810 processor nixed from Samsung smartphone

Stock of San Diego's giant Qualcomm plummeted 10.28 percent today (January 29) on a day when the overall market was strong. The company said that its Snapdragon 810 processor will not be in the upcoming design cycle of a major customer. That customer is believed to be Samsung, which reportedly won't use Snapdragon 810 in the production of their Galaxy S6 smartphone. Qualcomm's stock lost $7.30 to close at $63.69.

Qualcomm lowered its 2015 earnings per share forecast to a range of $4.04 to $4.34, compared to the earlier peg of $4.33 to $4.63. Revenue is also expected to be softer. The company is concerned about growing competition in China.

Argus Research lowered its price target on Qualcomm to $80 from $89 but still ranks the stock a buy. The business lost from the Samsung move "is a blow," said Argus, noting that "turbulence is intensifying for every smartphone maker not named Apple." Qualcomm has products in "many phones that could benefit from Samsung's weakening position."

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Stock of San Diego's giant Qualcomm plummeted 10.28 percent today (January 29) on a day when the overall market was strong. The company said that its Snapdragon 810 processor will not be in the upcoming design cycle of a major customer. That customer is believed to be Samsung, which reportedly won't use Snapdragon 810 in the production of their Galaxy S6 smartphone. Qualcomm's stock lost $7.30 to close at $63.69.

Qualcomm lowered its 2015 earnings per share forecast to a range of $4.04 to $4.34, compared to the earlier peg of $4.33 to $4.63. Revenue is also expected to be softer. The company is concerned about growing competition in China.

Argus Research lowered its price target on Qualcomm to $80 from $89 but still ranks the stock a buy. The business lost from the Samsung move "is a blow," said Argus, noting that "turbulence is intensifying for every smartphone maker not named Apple." Qualcomm has products in "many phones that could benefit from Samsung's weakening position."

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Comments
8

The company and its products are still a crapshoot. The current state of equities markets with high volatility makes every stock price subject to short term whims. I'm not buying Qualcomm stock at any price, even one that appears depressed.

Jan. 30, 2015

Visduh: Your sentiments may apply to the entire stock market. This is looking more and more like a possible bear market forming. However, the evidence isn't yet so persuasive that I am doing any selling. I believe the Fed will come to the rescue. I personally doubt that it will raise interest rates this year. If it does, it will be no more than a quarter of 1 percent. Other central banks around the world -- particularly Europe -- are printing money frenetically, as the Fed has been doing since early 2009. Our Fed may even add stimulus (another QE?), rather than toning it down.

That money is going to the equity market in great part because of the massive wealth and income inequality. (Worldwide, the upper 1 percent within two years will have more wealth than the lower 99 percent.) Middle class incomes, adjusted for inflation, have fallen for several decades. This means that as the central banks print money, it does not go into consumption, causing inflation. It goes into financial asset inflation (primarily stocks and bonds). Note: this is my theory. I don't know that other economists believe that. Best, Don Bauder

This will go on until the middle class revolts. Best, Don Bauder

Jan. 30, 2015

OOPS. I AM NOT AN ECONOMIST. If you read the response to Visduh above, you will see I refer to "other economists." This implies that I am an economist. I am not. I only write about the topic. Best, Don Bauder

Jan. 30, 2015

There are still bargains for long investors. Especially in semiconductors if you study them. I hold few individual stocks, but a couple, like RFMD have over performed. If you feel the broad market still has some steam, Qualcomm may be a good buy now.

Jan. 30, 2015

Ponzi: Yes, Qualcomm may be a bargain at these prices. The question: do you feel the broad market still has some steam? I suspect it has, despite the fact that stocks generally are overvalued, as are bonds. But stocks are less overvalued than fixed instruments. The main thing holding this market up since early 2009 has been the flood of money from central banks all over the world. They don't dare stop. Best, Don Bauder

Jan. 30, 2015

how much of qualcomm's tek is in the hands of the Chinese now without getting proper license from the commerce dept ?

Jan. 30, 2015

Murphyjunk: I don't know the answer to that question. I do know the company is concerned about the Chinese market. It is fearful of increasing competition. Best, Don Bauder

Jan. 30, 2015

Mediatek and Marvel's products are catching up to - and arguably surpassing in some instances - QCOM's application processor performance.

QCOM is fighting legal wars on several international fronts.

This drop probably reflects both of those factors.

Jan. 30, 2015

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