Monday, 23 January 2017

QCOM - AAPL causing problems

Whilst the main market saw some moderate weakness, there was severe downside in Qualcomm (QCOM), which imploded at the open, settling -12.7% @ $54.88. Apple's announcement on Friday that it intends to claim $1bn against QCOM has massively upset the market... with earnings just a few days away.

QCOM, daily

QCOM, monthly


Pre-market saw the loss of the 200dma, and that really saw the selling intensify. Short term... price action is likely to be volatile... but remaining inclined to the downside. Next support is the big $50 threshold.

I would imagine QCOM and AAPL will eventually be able to agree on something outside of a court, but for now... that could be many... many months away. In the meantime, QCOM now has a $1bn shadow hanging over it.

Keep in mind, QCOM net profit for the year to Sept'2016 was $5.7bn. So... $1bn is still only 20% of one year's earnings. The real problem would be if AAPL decided to go buy its hardware elsewhere. 

*next QCOM earnings: Wed' Jan'25th.. AH. Market is expecting EPS of $1.18.