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Qualcomm Stock Rises As Apple’s 5G Modem Chip ‘Fails,’

Qualcomm Stock Rises As Apple’s 5G Modem Chip ‘Fails,’

Apple‘s efforts to replace Qualcomm as a supplier of 5G modem chips for its iPhone have hit a developmental snag, a prominent Apple stock analyst said Tuesday. Qualcomm stock increased on the news.

In a Twitter thread, TF International Securities analyst Ming-Chi Kuo said Apple appears to have “failed” in its internal expansion of a 5G modem chip. 

He said that Qualcomm will remain the exclusive supplier of 5G iPhone modem chips through the second half of 2023. 

Qualcomm had previously estimated it would supply just 20% of those iPhone chips in late 2023.

Apple did not respond to a request for comment on the report.

“I believe Apple will continue developing its 5G chips,” Kuo said. “But by the time Apple succeeds and can replace Qualcomm, Qualcomm’s other new businesses should have grown enough to significantly offset the negative impacts caused by the order loss of iPhone 5G chips.”

Qualcomm Stock Rises As Apple's 5G Modem Chip 'Fails,'

Qualcomm Stock Jumps

Kuo said that the development is likely to drive Qualcomm revenue and earnings estimates higher for 2023 and early 2024.

On the stock market today, Qualcomm stock rose 3.5% to close at 131.60. Apple stock dropped 3% to 137.44 in an overall down day for stocks.

Qualcomm is shifting its business from making wireless chips primarily for smartphones to making them for a host of devices for the Internet of Things.

That includes chips for automobiles, Arm-based PCs, and virtual reality and augmented reality headsets.

According to IBD Stock Checkup, Qualcomm stock ranks fifth out of 33 stores in IBD’s fabless semiconductor industry group. 

It has an IBD Composite Rating of 72 out of 99.

IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.


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