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Shares of Qualcomm (QCOM) were advancing 2.7% to $59.29 on Monday morning after JPMorgan analyst Rod Hall raised his rating on the stock to Overweight from Neutral, citing increased optimism around the chipmaker's pending $47 billion acquisition of NXP Semiconductor (NXPI) . The deal, which is expected to close by year's end, is poised to be "highly accretive" to Qualcomm's earnings once finalized. 

"We believe there is material fundamental upside given the expected closure of the NXPI acquisition by the end of this year," said Hall, who also raised Qualcomm's stock price target to $68 from $50, in a note to clients on Monday. "While we expect more negative news around the Apple (AAPL) dispute, we see stoppage of royalty payments by Apple contract manufacturers on April 28 as a major milestone." 

Hall was referring to when Apple on April 28 decided it would not pay royalties to contract manufacturers for Qualcomm's smartphone patents, marking the latest chapter in Qualcomm and Apple's high-profile legal battle. Apple sued Qualcomm in January, claiming that Qualcomm was overcharging for chips and had withheld as much as $1 billion in licensing rebates.

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Qualcomm then filed a countersuit last month, alleging that Apple encouraged regulatory attacks against it and breached agreements with the chipmaker. Last week, Qualcomm doubled down by suing four of Apple's contract manufacturers -- Foxconn, Compal, Wistron and Pegatron -- for not paying royalties to Qualcomm for its patents. 

Qualcomm has been feeling the heat ever since the lawsuit erupted, with its stock down nearly 9.4% since Apple's original complaint was filed on January 20. In its latest earnings release, Qualcomm gave a wider-than-normal earnings forecast for the current quarter, noting that it cannot predict whether contract manufacturers would continue to underpay royalties, stoking analysts' fears that the lawsuits could continue to weigh on Qualcomm's bottom line. 

Hall disagreed, however, noting that he expects an "eventual resolution" with Apple, predicting that the Cupertino, CA-based company will ultimately decide it wants to preserve its relationship with Qualcomm. The impending NXPI deal closure, as well as the upcoming iPhone sales cycle should generate upside for Qualcomm, he added. 

"While we acknowledge that Apple's attack has been broader than we have seen with other disputes, we believe it is ultimately in Apple's interest to complete a new deal with Qualcomm," Hall wrote. "Though volatility in the shares could remain high through the summer, we see the valuation gap as too large to continue to ignore with NXPI closure approaching."

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