Qualcomm rose 3.6 per cent at the start of trading on Friday, up nearly 70 per cent from its April low, hitting an intraday high of $95.74 on January 3, 2000, the highest on record. Citi had earlier raised Qualcomm’s rating to buy from a neutral level, with its target price rising to $108 from $89. Citi writes that the “long-awaited 5G slope” has begun to take shape this year.
Citi believes Qualcomm is “one of the most affected stocks by 5G” and that 2020 will be “a year of accelerated revenue growth and earnings per share growth, thanks to the start of the 5G upgrade cycle”.
Analyst Christopher Danely expects the increase in market share to lead to higher royalties and average selling prices.
Despite Citi’s “long-standing concerns” about Apple’s self-developed chips and pricing pressures, “the 5G upgrade cycle will put these trends on hold for at least the next 12 months”.