Qualcomm's (QCOM) Samsung Snapdragon News Suggests Turnaround Gaining Strength - Wells Fargo

Wells Fargo analyst, David Wong, reiterated his Outperform rating on Qualcomm (NASDAQ: QCOM) and believes the resolution of issues with Snapdragon at Samsung could spur a multi year turnaround in its royalty and chip businesses.

Qualcomm announced that Samsung's newest flagship Galaxy S7 series phones use its Snapdragon 820 applications processor ''in select regions''. Last year, the issues with the prior generation Snapdragon 810 chip resulted in Qualcomm losing the applications processor socket in the Samsung Galaxy S6 phone. They view this latest announcement from Qualcomm as a further indication that the company has resolved the problems it faced in 2015 with its prior generation chip family.

Over the last three months Qualcomm has noted design win momentum with its next generation chips and announced several new license agreements in China. These developments build our confidence that Qualcomm is at the beginning of a multi-year turnaround in both its royalty and chip businesses, which could create upward momentum in the stock.

The firm reiterated an Outperform rating with a $70-$80 valuation range.

For an analyst ratings summary and ratings history on Qualcomm click here. For more ratings news on Qualcomm click here.

Shares of Qualcomm closed at $49.42 yesterday.

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