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Qualcomm (QCOM) Stock Jumps 3.5%: Will It Continue to Soar?

Qualcomm (QCOM) shares rallied 3.5% in the last trading session to close at $131.60. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 9% loss over the past four weeks.

Speculations are rife that Qualcomm will continue to be the exclusive supplier of 5G chips for all Apple smartphones slated to be launched in the second half of 2023. Various media reports suggest that Apple has likely faced certain operational glitches in its endeavor to develop indigenous modem chips for iPhones. This likely production failure will lead to Qualcomm providing the requisite chips for upcoming iPhone models, generating incremental revenues.

Qualcomm is one of the largest manufacturers of wireless chipset based on baseband technology. The company is focusing to retain its leadership in 5G, chipset market and mobile connectivity with several technological achievements and innovative product launches. It is likely to help users experience seamless transition to super-fast 5G networks, delivering low-power resilient multi-gigabit connectivity with unprecedented range and best-in-class security. This, in turn, would further offer the flexibility and scalability needed for broad and fast 5G adoption through accelerated commercialization by OEMs. Qualcomm is reportedly the only chipset vendor with 5G system level solutions spanning both sub-6 and millimeter wave bands and one of the largest RF (radio frequency) front end suppliers with design wins across all premium-tier smartphone customers.

This chipmaker is expected to post quarterly earnings of $2.86 per share in its upcoming report, which represents a year-over-year change of +49%. Revenues are expected to be $10.89 billion, up 35.1% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Qualcomm, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on QCOM going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Qualcomm is a member of the Zacks Wireless Equipment industry. One other stock in the same industry, Clearfield (CLFD), finished the last trading session 5.6% lower at $61.57. CLFD has returned 5.8% over the past month.

For Clearfield, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.67. This represents a change of +52.3% from what the company reported a year ago. Clearfield currently has a Zacks Rank of #3 (Hold).

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QUALCOMM Incorporated (QCOM): Free Stock Analysis Report
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