The news shocked the world.
Qualcomm and Apple just settled a major legal battle over billions of dollars in royalties and licensing fees, just as it was going to trial. As part of the settlement, all legal action will be dropped, and Apple will buy Qualcomm chips again.
Up 10.5% on the day, Qualcomm got an extra boost from upgrades.
Analysts at Stifel, J.P. Morgan and Evercore ISI all upgraded Qualcomm on the news. Mizuho Securities increased its price target to $82 per share from $62. Canaccord Genuity upped its target to $89 per share from $75 and reiterated its buy rating on the stock, as well.
Thanks to the settlement, we could now see a 5G iPhone in 2019
With the settlement, Apple is now in a position to bring a 5G iPhone to market as early as this fall 2019.
“For consumers this is important,” as reported by USA Today. “Apple can stay competitive and give their customers a 5G experience no later than 2020. It also means that Qualcomm and Apple can be more aggressive in helping drive 5G innovation in the new decade.”
Even better for. Qualcomm, Intel said it was dropping out of the 5G smartphone market, effectively getting out of Qualcomm’s way. While Intel CEO Robert Swan said the company would continue to invest in 5G infrastructure, he says that the smartphone market will provide it “with no clear path to profitability and positive returns,” as quoted by CNBC.
The 5G Boom is Just Getting Underway
Over the next 16 years, 5G is expected to create a $12 trillion opportunity.
The U.S. committed $400 million to 5G over the last three years. China will have invested $400 billion by 2025 with 430 million users. South Korea invested $1.5 billion.
Even President Trump is so enamored with the technology, he tweeted:
“I want 5G, and even 6G, technology in the United States as soon as possible. It is far more powerful, faster, and smarter than the current standard. American companies just step up their efforts, or get left behind. There is no reason that we should be lagging behind on something that is so obviously the future”
By 2035, about $12.3 trillion worth of goods and services will be enabled by 5G networks, and the rollout will add approximately $3 trillion to the worldwide GDP.
In short, it’s beneficial to add 5G to your portfolio.