Qualcomm (QCOM) stock gained in today’s pre-market trading session, and it rose over 2% in today’s trading session at 1:00 PM EDT. The jump in the stock, which followed a 4.6% decline on Tuesday, came after the markets rebounded today.
The Dow Jones Industrial Average surged over 200 points or 0.83%. Plus, the S&P 500 and the Nasdaq Composite gained about 1.01% and 1.17%, respectively. Wall Street recovered after China proposed a partial trade deal.
According to Bloomberg’s October 9 report, China is ready to consider a “partial trade deal” if the Trump administration doesn’t impose any more tariffs. Further, China is prepared to offer concessions on non-core products such as the purchase of agricultural products.
Notably, the Trump administration plans continue with its planned tariff hike on Chinese imports on October 15, if the two countries do not make any progress in the trade deal. Last month, Trump had delayed the tariff hike from October 1 to October 15. Talks between the US and China are slated to start on October 10.
The news of a partial trade deal sent a wave of hope to the US markets, particularly semiconductor stocks. Chip stocks NVIDIA (NVDA), Marvell (MRVL), Advanced Micro Devices (AMD), Intel (INTC), and Broadcom (AVGO) also gained on the news. These stocks gained 1.97%, 2.71%, 1.03%, 1.57%, and 1.44%, respectively, in today’s trading session at 1:00 PM EDT.
Markets tumbled yesterday
On October 8, the stock markets closed in the red as the Dow slid over 300 points. The Trump administration blacklisted eight more Chinese companies on human rights violations, accelerating trade war tensions. The reports of restricting investments of government pension funds in China further dimmed hopes of a trade deal.
China’s foreign ministry spokesman, Geng Shuang, also signaled that the country would retaliate over the expansion of blacklisted Chinese firms. There were also reports that the Chinese delegation may shorten its trip to Washington, DC. A shorter stay would further reduce the possibility of the planned trade talks. Tensions escalated further after China’s media banned NBA telecasts in the country.
A prolonged trade war would be highly detrimental to the chipmakers, as China is their largest market. Trump’s ban on US firms against trading with Huawei had a multifold impact on Qualcomm. Notably, chip stocks such as Qualcomm, Micron, Broadcom, and Intel are highly dependent on China for revenues.
The additional tariffs on Chinese imported goods might also raise the prices of graphics cards, hurting chipmakers Advanced Micro Devices and NVIDIA. In our view, even a partial trade deal would soothe the ongoing market concerns at this point.
Qualcomm stock performance
On October 8, Qualcomm stock fell 4.6% and closed at $72.85. At this closing price, the company had a market capitalization of $90.6 billion.
Qualcomm is trading at a discount of 19.4% to its 52-week high of $90.34. Qualcomm stock is trading at a premium of 48.4% to its 52-week low of $49.10. Qualcomm has returned 30.7% year-to-date through October 8.
Today, Qualcomm stock is 5.0%, 3.0%, and 1.4%, respectively, below its 20-day, 50-day, and 100-day moving averages. However, its stock is 7.7% above the 200-day moving average of $67.65.
For the last 14 days, Qualcomm stock has had an RSI (relative strength index) score of 40.09, which indicates that investors are neutral on the stock. Qualcomm stock closed near its Bollinger Band lower-range level of $73.54, which suggests that it is oversold.
Analysts’ recommendations and target price
Among the 29 analysts covering Qualcomm stock, 15 have a “buy” rating on the stock. Thirteen analysts have a “hold” rating on the stock, and one analyst gave Qualcomm a “sell” rating.
Currently, analysts gave a 12-month target price of $79.35 on Qualcomm stock. On October 8, the stock was trading at a discount of 8.2% to analysts’ 12-month target price. The median target price was $77.00 on the same date.
To learn more about Qualcomm, please read Qualcomm to Expand 5G Chip Tech Next Year and Qualcomm Seeks Licensing Deals and 5G Market Growth.