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Another Analyst Gets Even More Bullish on Qualcomm

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By Evan Niu, CFA, The Motley Fool

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Following a bullish note on Qualcomm from Susquehanna analyst Chris Caso, the mobile chip giant is getting another analyst vote of approval today. This time, we’re talking about Canaccord Genuity analyst Mike Walkley boosting his estimates on Qualcomm’s prospects.

The analyst is reiterating a “buy” rating on the company while adding a couple bucks to his price target, bringing it to $85. Walkley believes that Qualcomm’s core businesses are holding up admirably to recent assaults from Broadcom , Intel, and NVIDIA . In fact, he’s even raising his market share estimates.

In February, Broadcom announced a new LTE baseband chip to target the discrete modem market, supporting next-generation technologies like LTE Advanced carrier aggregation. There is even speculation that Broadcom is looking to expand its relationship with Apple beyond Wi-Fi combo chips, and that the company was hoping to score another iPhone spot.

That same month, NVIDIA reached a major competitive milestone with its Tegra 4i. Previously code-named “Grey,” the Tegra 4i is NVIDIA‘s first applications processor with an integrated LTE modem. Qualcomm’s focus on integration has been a key driver of its smartphone market share gains, and NVIDIA wants a piece of that success.

Even though rivals are sampling competing chips this year, Canaccord believes that Qualcomm’s third-generation chipsets still boast considerable advantages to the first-generation silicon of other companies, particularly in areas like global and support and TD inclusion. LTE frequency fragmentation is also a tough nut to crack for newer entrants.

Like Caso, Walkley also sees Qualcomm benefiting greatly from Samsung’s new Galaxy S4. While only about a third of Galaxy S III variants were LTE enabled, the analyst estimates that two-thirds of Galaxy S4 variants will feature LTE connectivity. Qualcomm’s Snapdragon processors also seem to be in more Galaxy S4 variants this year instead of Samsung’s own Exynos. Add in the fact that Galaxy S4 units should come in at about 100 million over the next year, up from approximately 65 million Galaxy S III units to date, and you get a recipe for some healthy revenue upside.

NVIDIA was ahead of the curve launching its mobile Tegra processor, but investing gains haven’t followed as expected, with the company struggling to gain momentum in the smartphone market. The Motley Fool’s brand-new premium report examines NVIDIA‘s stumbling blocks, but also homes in on opportunities that many investors are overlooking. We’ll help you sort fact from fiction to determine whether NVIDIA is a buy at today’s prices. Simply click here now to unlock your copy of this comprehensive report.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Can Samsung Pick Up Apple's Slack for Qualcomm?

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By Evan Niu, CFA, The Motley Fool

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There’s a wide range of opinion over how Apple‘s iPhone unit figures will come in when it reports fiscal second quarter earnings on April 23. On one hand, the company is coming off of an all-time record quarter, and sequentially declines following the holidays are the norm for consumer electronics companies.

Analysts continue to ratchet down estimates on fears that iPhone sales aren’t driving growth to the extent that investors are hoping, which puts even more pressure on upcoming models to reinvigorate momentum. Will potential iPhone weakness lead to shortfalls in Qualcomm‘s figures, as the exclusive supplier of baseband modem chips?

Not if Samsung has anything to do with it, according to Susquehanna analyst Chris Caso. The analyst estimates that Apple produced roughly 35 million iPhone units in the March quarter, which is on the low end of his expectations. While that’s below the consensus estimate of 37 million units, remember that there are a lot of factors like beginning inventory positions that make individual supply data points “not a great proxy for what’s going on,” even if they’re accurate (a big if).

An iPhone slowdown is still entirely possible, but the good news for Qualcomm is that it was able to score a spot in certain geographical variants of Samsung’s new Galaxy S4, which launches later this month. Samsung’s been trying to use its Exynos chips as much as it can, but Qualcomm’s power efficiency advantages aren’t easily replicated.

Since Qualcomm enjoys roughly double the content in Galaxy S4 units compared to iPhone units (baseband and processor as opposed to just baseband), Samsung’s flagship will give Qualcomm’s chip businesses a boost. The licensing business will also benefit since Samsung’s royalties are based on higher average selling prices, according to Caso.

That being said, Apple is expected to rebound later in the year as its product cycles have become more back-loaded, and new iPhone models are expected this summer.

Qualcomm rides the coattails of the two top smartphone vendors as they take seasonal turns launching their latest and greatest devices. When one slacks, the other picks up, and it’s all gravy for Qualcomm.

There’s a debate raging as to whether Apple remains a buy. The Motley Fool’s senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

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Source: FULL ARTICLE at DailyFinance