NEW YORK (TheStreet) -- Shares of Qualcomm (QCOM) - Get Qualcomm Inc Report and NXP Semiconductors (NXPI) were up in Thursday morning trading after Qualcomm agreed to purchase the automotive chips supplier for roughly $38 billion.
The transaction is worth $47 billion, including debt.
The deal is "brilliant" for Qualcomm, which had been pigeon-holed as a designer of smartphone chips, TheStreet's Jim Cramer said on CNBC's "Squawk on the Street" this morning. Qualcomm has now diversified into the Internet of Things and automotive industries, which are two of the hottest areas right now.
"This is one of those deals that is made in heaven," Cramer claimed.
Cramer said the deal reminds him of the proposed merger between New York City-based Pfizer (PFE) and Dublin-based Allergan (PFE), which has since fallen apart.
NXP is based in the Netherlands, which will allow Qualcomm to use overseas cash to pay for the deal.
"I think Qualcomm goes from being at one point an expensive stock to perhaps being among the cheapest in the entire tech sector," Cramer contended. "That's how good [the deal is]."
(NXP is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holding with a free trialhere.Qualcomm is held in David Peltier's Dividend Stock Advisor portfolio. See all of his holdings with afree trial.)
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B.
Qualcomm's strengths such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and attractive valuation levels. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
You can view the full analysis from the report here: QCOM
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.