On Monday, Wells Fargo analyst Gary Mobley downgraded his rating on Qualcomm stock citing as a main reason Apple’s work to create its own internal modem starting with the iPhone 16 model range in 2024.
Karishma Vanjani for Barron’s:
Semiconductor makers have been hit hard this year as the fastest inflation in 40 years has crimped demand for chips in everything from home computers to smartphones. The iShares Semiconductor exchange-traded fund, which tracks the performance of the largest semiconductor companies, is down 33% this year. Analysts such as Deutsche Bank’s Sidney Ho see the pain continuing.
But when investor sentiment turns positive on chip stocks, Mobley said “Qualcomm shares will continue to trade at a discount to peers.”
For one, the analyst cites Apple‘s move to create its own internal modem for the iPhone 16. Apple in 2019 bought Intel‘s smartphone-modem business to phase out its reliance on Qualcomm.
In a call discussing fourth-quarter earnings, Qualcomm finance chief Akash Palkhiwala said he expects “minimal contribution from Apple product revenue in fiscal 2025,” which starts in October 2024.
MacDailyNews Take: Apple modems are coming… eventually. Hopefully the company can hit the 2024 date and remove the Qualcomm extortionist from the modem equation ASAP!
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Is there going to be or how much of an impact on cellular performance will be with the forthcoming Apple modem?, after all it is going to be a new component