So far, Qualcomm (NASDAQ: QCOM) has been experiencing significant stock market success in 2024, albeit not without facing some headwinds along the way.
Indeed, though the stock is up 23.50% year-to-date (YTD) to its latest closing price of $173.18, it is simultaneously down a significant 24% from its June highs near $230.
The growing issues become even more evident once the 5.13% drop in the extended session between Tuesday, October 22, and Wednesday, October 23, is factored in.
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Such a stock market setup is well reflected in the recent rating and price target revisions assigned to QCOM. While Qualcomm shares are still not overwhelmingly considered a ‘sell,’ even the positive revisions have been accompanied by drops in the price forecasts.
Wall Street analysts revise QCOM stock price target
On October 21, for example, Susquehanna embodied this trend as it reiterated its ‘overweight’ rating of QCOM stock at the start of this week, and the leading market maker elected to lower the 12-month target from $250 to $230.
On October 8 and 16, Cantor Fitzgerald and Citi (NYSE: C) followed a similar pattern – albeit while maintaining the less bullish ‘neutral’ rating – with the former reducing the forecast from $215 to $160 and the latter from $200 to $185.
The first QCOM stock revision of the month was the weakest of the four. On October 8, KeyCorp’s John Vinh elected to drop the previous ‘overweight’ – ‘buy’ – assessment and replace it with ‘sector weight’ – ‘neutral.’
Finally, the most recent ‘buy’ revisions for Qualcomm – once Susquehanna is disregarded – date back to mid-September when both TD Cowen and JPMorgan (NYSE: JPM) rated it as such. Still, it is worth pointing out that JPMorgan’s revisiting of QCOM was also accompanied by a target reduction from $230 to $210.
Why Qualcomm may soon face major downgrades
Though many of the prior reassessments of QCOM stock were driven by optimistic expectations for the Snapdragon 8 Gen 4 (SD8G4) mobile chipset and only somewhat shaded by the ongoing dispute between Qualcomm and Arm Holdings PLC—ADR (NASDAQ: ARM), the next round of revisions might paint a darker picture.
Arm Holdings recently notified Qualcomm that it is canceling the agreement, allowing the latter to use the former’s intellectual property to design chips, per a Bloomberg report from October 22.
The move was the latest escalation in a dispute that started in 2022 over alleged breach of contract and trademark infringement stemming from Qualcomm’s 2021 acquisition of the chip-design startup Nuvia, another Arm licensee.
Arm Holdings argued that the purchase necessitated a contract renegotiation, while Qualcomm maintained it was operating within its rights under the existing agreement.
Whatever the dispute resolution may be, the news of the license cancellation sent QCOM shares down. They fell 5.13% in the extended session from their latest closing price of $173.18 to their press time price of $164.30.
