Investors Saw an Opportunity To Buy Qualcomm Stock When Apple Announced It Was Discontinuing the iPhone SE

Qualcomm Stock

Qualcomm Stock (NASDAQ:QCOM)

Despite a general market uptick on Friday, shares of San Diego-based chipmaker Qualcomm (NASDAQ:QCOM) rose by over 4% after a prominent analyst labeled Qualcomm stock the “largest beneficiary” of Apple’s (NASDAQ:AAPL) rumored decision to scrap the next iteration of the iPhone SE.

Ming-Chi Kuo, an analyst with TF International Securities, stated on Friday that Qualcomm would likely continue to be the “exclusive supplier” of baseband chips for the iPhone 16 series, which is scheduled to be released in 2024. This is in contrast to the expectation that the company would begin to lose orders from Apple the following year.

Apple had previously intended to unveil its baseband processor in 2024, allowing the low-end iPhone SE 4 to adopt it first. The company would then determine whether to let the iPhone 16 use its baseband chip depending on the development state of the iPhone SE 4, according to Kuo’s blog post. “Due to worries that the performance of the in-house baseband chip may not be up to pace with Qualcomm’s,” Kuo wrote.

“However, the cancellation of the iPhone SE 4 has considerably enhanced the odds of Qualcomm retaining the only provider of baseband chips for the 2H24 new iPhone 16 series,” Kuo said, which is better than the market consensus that Qualcomm would start losing iPhone orders in 2024. The market consensus predicts that Qualcomm will start losing iPhone orders in 2024.

A report from Kuo from the previous month stated that Apple had discontinued the iPhone SE 4 due to low demand.

Rumors were circulating that Apple might release its 5G processors in the following year.

Kuo also mentioned that Qualcomm would likely continue to dominate the high-end radio frequency market for mobile phones this year and next, which will result in “markedly higher profits” than its competitors. This prediction was made about both the current year and the following year.

The analyst also said that the product mix offered by Qualcomm stock could help reduce the adverse effects of a prospective recession and allow the company to return to “strong growth” after the economy has recovered.

Qualcomm stock introduced Snapdragon Satellite on Thursday, a satellite-based messaging system capable of two-way communication designed for high-end Android phones.

Featured Image: Pixabay @ Monoar_CGI_Artist

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