Qualcomm Stock Surges On Strong 5G Wireless Chip Demand


Qualcomm (QCOM) and other wireless chipmakers saw their shares pop higher on Friday amid reports of strong radio-frequency chip demand. Qualcomm stock broke out of a five-weeks-tight consolidation.


Sales of radio-frequency, or RF, chips went from “very strong” growth in October to “outstanding” growth in November, Eric Ross, chief investment strategist for Cascend Securities, said in a note to clients on Friday.

“We believe this should lead to strong earnings” for RF chip suppliers, including Skyworks Solutions (SWKS) and Qualcomm, he said. Ross has buy ratings on Skyworks stock and Qualcomm stock.

Chipmakers are benefiting from the transition to 5G wireless because of the increased RF content required per chip, Ross said.

Qualcomm Stock Breaks Out Of Consolidation

Qualcomm stands to gain from the increased number of frequency bands being packed into RF chips, Piper Jaffray analyst Harsh Kumar said in a note to clients Friday.

“An early 4G phone worked with roughly 16 bands, while a modern LTE phone with carrier aggregation now has to work with over 1,000 bands,” Kumar said. “In 5G, a phone will have to manage 10,000 bands.”

Qualcomm boasts having a complete solution to address the complex RF needs in modern phones, Kumar said. He has a neutral rating on Qualcomm stock.

On the stock market today, Qualcomm stock jumped 5.1% to 157.62. Qualcomm was the IBD Stock Of The Day on Monday after it formed a four-weeks-tight pattern with a buy point of 153.43, according to IBD MarketSmith charts.

Meanwhile, Skyworks stock climbed 4.5% to 150.17 on Friday. Among other wireless chipmakers, Qorvo (QRVO) gained 3.9% to 165.35 and Broadcom (AVGO) advanced 3% to 411.68.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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