Qualcomm (QCOM - Get Report) spiked Thursday as the broader markets retreated on reports it is in talks to acquire NXP Semiconductors (NXPI - Get Report) to capture the title of the top supplier of chips to cars. Tesla Motors (TSLA - Get Report) , meanwhile, fell on a report that noted its paint fracturing emissions may ultimately curtail its ability to expand its production capability. Alphabet (GOOGL - Get Report) was also down, despite its plans to have its YouTube compete with such streaming music companies as Spotify.
Chip designer and seller Qualcomm soared after reports surfaced that the company was in talks to buy NXP, which would not only propel Qualcomm to the position of the No. 1 chip supplier for cars but also expand its chip presence from "dozens of major product lines to hundreds," according to a report in the Wall Street Journal.
The Journal, citing sources, said an agreement between the companies may be struck in the next two or three months and would likely rank as the largest deal in the ever consolidating semiconductor industry with a value of over $30 billion.
Qualcomm, which is known for its chips that go into such wireless mobile devices as smartphones, is facing a challenge as the smartphone industry matures and sales slow. The company derives the bulk of its revenue from designing and selling chips, notes the Journal, but over half of its profits come from licensings the company's wireless patents to smartphone makers.
NXP is a holding in Jim Cramer's Action Alerts PLUS. In an alert to AAP subscribers following the Journal's report, Cramer and AAP co-manager Jack Mohr wrote: "Although we await incremental information before drawing a conclusion, we would expect the company to fetch at least $100-$115 a share in case of any takeover."
Qualcomm soared 6.3% to close the day at $67.45. NXP jumped nearly 17% to $96.12.
Tesla shares slid after a report from automotive news site Daily Kanban, which noted the high-end electric car maker will be restricted to pumping out approximately 200,000 vehicles, due to the emissions generated from its paint shop.
The restrictions are part of the Clean Air Act and California's Air Resources Board regulations. Tesla, which has a paint factory that accounts for a large share of its overall emissions, has yet to apply for an emissions permit that would cover its expansion plans for its paint shop to allow it to increase its vehicle production.
Tthe California approval process can last up to two years given the heavy smog that the Golden State contends with. Tesla shares fell 2.7% to end the session at $200.70.
Alphabet's video streaming site YouTube has hired Lyor Cohen, a former Def Jam and Warner Music executive, to repair a troubled relationship with the recording industry and potentially put the site in greater competition with the likes of Spotify and Pandora (P) .
YouTube has had a combative relationship with the music industry, with major artists taking the site to task for allowing their copyrights to be violated with users posting their work to the site. And in addition to receiving backlash from artists, YouTube has also had to deal with the music labels and their cry for getting a piece of the advertising revenue generated when music clips and videos are shown.
With the hiring of Cohen, it pay put YouTube on a path to start a subscription-based model to sell music like Spotify and Pandora.
Alphabet's shares dipped 0.9% to close at $802.64.