Michael Hakes - CFA, MBAQualcommQCOMPAST TOP PICKSep 15, 2023

Has caught his eye, as it's just starting to move up on the short-term. Three positives: pretty big price action today, one of his complex technical indicators says Buy, and rising RSI compared to the S&P. If we can get above $146, that will usher in some air space to around $195-200. Short-term and long-term both look good. He'd buy today. 

They will benefit from the next iPhone cycle that is coming in the next 12 months. QCOM makes their chips. Secondly, they will supply more EV cars with chips. Third, same goes with gen-AI.

Earnings expectations coming down, has recently sold shares. Better options for investors in semi-conductor sector. 

He bought and sold this too early. QCOM has too much hype around it.

Chart indicating momentum upwards. Would recommend chasing the trend. Very good business. Recent breakout is sustainable. Good time to ride the "trend". 

His choice in the space, which will do well over time.

Reasonable multiple of 15x earnings. Problems with handset growth, affecting all participants, but it's a cycle. Will do very well coming out of it. Generative AI will be the next boon to handsets. Growing in automotive and internet of things.

Barring a sharp contraction in the global economy, the more cyclical semis should perform well going forward including QCOM.

Handsets are bottoming, so they will be back up again. Same goes with internet of things and autos. QCOM is a cheap stock and up only 18% this year. 

Just bought it as barbell position. For every AMD position, he wants to match it with a Qualcomm.

End market has been in a downdraft. Chart tends to be volatile, very cyclical. Semiconductor stocks are trades, not long-term holds. AAPL eventually wants to bring chips in-house, an overhang.

It trades cheaply at 9x PE with earnings power of $12/share. They have a $30 billion backlog in auto. So, the Apple deal runs out in 3 years, then they can switch to supplying autos to drive revenues.

The Apple news of striking a chip deal with Qualcomm surprises him in a good way. The three-year deal is a long time. The stock is up today and it's been very disappointing. Maybe both companies are learning to live with each other after a long history of lawsuits. Qualcomm remains a cheap company focused on IP needed for mobile telephony, an industry that has been terrible for 1.5 years (and he's waiting for it to bottom). China is key to their business, but China is having economic trouble these days. Maybe all the bad news is priced into this, but watch your back with this stock.

It buys Qualcomm time, but the difficulty in reaching this deal suggests how hard it is to produce your own chips and maybe it shows how much Apple needs Qualcomm.