Dj Qualcomm Inc. Stock Underperforms Wednesday When Compared To Competitors

The S&P 500 Index today is up +0.04%, the Dow Jones Industrials Index is up +0.27%, and the Nasdaq 100 Index is down -0.32%.

Stock index futures today are mixed. The broader market initially moved higher today after US October consumer prices rose as expected. Stocks also found support, and T-note yields fell on dovish comments from Minneapolis Fed President Kashkari, who said inflation is headed in the right direction and he doesn't think inflation is stuck above the Fed's 2% target.

However, the weakness in chip stocks is limiting gains in the overall market. Also, hawkish comments from Dallas Fed President Logan weighed in stocks when she said, "I anticipate the FOMC will most likely need more rate cuts to finish the journey," but policymakers should "proceed cautiously" given uncertainties about how restrictive monetary policy currently is.

US Oct CPI rose +0.3% m/m and +2.6% y/y, right on expectations. Oct CPI ex-food and energy remained unchanged from Sep at +3.3% y/y, right on expectations.

US MBA mortgage applications rose +0.5% in the week ended November 8, with the purchase mortgage sub-index up +1.9% and the refinancing sub-index down -1.5%. The average 30-year fixed rate mortgage rose +5 bp to 6.86% from 6.81% in the prior week.

Stocks have rallied sharply over the past week, with the S&P 500, Dow Jones Industrials, and the Nasdaq 100 posting new record highs on speculation President-elect Trump will boost corporate profits through tax cuts and reduced regulation.

The markets are looking ahead to Friday’s report on retail sales, which will be looked at to see if consumer spending is holding up. Oct retail sales are expected to be up +0.3% m/m, and Oct retail sales ex-autos are also expected to be up +0.3% m/m. Also, the Q3 earnings season is wrapping up, with more than 50 companies scheduled to report quarterly results this week.

Of the 85% of companies in the S&P 500 that have released Q3 earnings so far, 75% surpassed the estimates, slightly below the 3-year average. According to Bloomberg Intelligence, companies in the S&P 500 have reported an average +8.4% y/y increase in quarterly earnings in Q3, more than double the preseason forecast.

The markets are discounting the chances at 82% for a -25 bp rate cut at the December 17-18 FOMC meeting.

Overseas stock markets today are mixed. The Euro Stoxx 50 fell to a 3-month low and is down -0.71%. China's Shanghai Composite Index closed up +0.51%. Japan's Nikkei Stock 225 fell to a 1-week low and closed down -1.66%.

Interest Rates

December 10-year T-notes (ZNZ24) today are up by +6 ticks. The 10-year T-note yield is down -0.8 bp to 4.420%. T-notes are moving moderately higher after today’s US October consumer price report was right on expectations, easing inflation concerns. The benign CPI report boosted the chances of a 25 bp rate cut by the Fed next month to 82% from 62% before the report. Also, dovish comments from Minneapolis Fed President Kashkari gave T-note a boost when he said that inflation is headed in the right direction. T-notes fell back from their best levels after European government bond yields rose and after Dallas Fed President Logan said policymakers should "proceed cautiously" on further rate cuts.

European government bond yields today are moving higher. The 10-year German bund yield is up +2.0 bp to 2.382%. The 10-year UK gilt yield is up +1.9 bp to 4.518%.

ECB Governing Council member and Bundesbank President Nagel said core inflation is still quite high, and there are still noticeable price pressures, especially in services. He added that President-elect Trump's tariff plans could cost Germany 1% of GDP and could cause economic contraction.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 23% for a -50 bp rate cut at the same meeting.

US Stock Movers

Albemarle is up more than +6% to lead gainers in the S&P 500 after RBC Capital Markets raised its price target on the stock to$133 from $108.

Charter Communications is up more than +4% after agreeing to buy Liberty Broadband in an all-stock transaction.

Cava Group is up more than +10% after reporting Q3 restaurant comparable sales rose +18.1%, stronger than expectations of +12.4%, and raised its full-year restaurant comparable sales to +12%-13% from a previous forecast of +8.5%-9.5%, well above the consensus of +9.95%.

Rivian Automotive is up more than +21% after Volkswagen AG raised its investment plans in the company by $800 million.

Spotify Technology is up more than +9% after forecasting Q4 monthly active users of 665 million, stronger than the consensus of 660.73 million.

Pure Storage is up more than +4% after Oppenheimer & Co initiated coverage on the stock with a recommendation of outperform with a price target of $70.

Rockwell Automation is up more than +3% after BNP Paribas Exane initiated coverage on the stock with a recommendation of outperform with a price target of $345.

Emerson Electric is up more than +1% after BNP Paribas Exane initiated coverage on the stock with a recommendation of outperform with a price target of $155.

Chip stocks are under pressure today to weigh on the overall market. ARM Holdings Plc and KLA Corp are down more than -3%. Also, Micron Technology , ON Semiconductor , and Lam Research are down more than -2%. In addition, Advanced Micro Devices , Texas Instruments , Applied Materials , Analog Devices , Marvell Technology , Microchip Technology , and Qualcomm are down more than -1%.

Super Micro Computer is down more than -4% to lead losers in the S&P 500 and Nasdaq 100 after saying it is unable to file its quarterly report on form 10-Q for the period ended September as it needs time to find a new auditor.

Skyworks Solutions is down more than -4% after forecasting Q1 revenue of $1.05 billion-$1.08 billion, weaker than the consensus of $1.09 billion.

Groupon is down more than -23% after reporting Q3 revenue of $114.5 million, below the consensus of $118 million, and forecast full-year revenue of $486 million-$493 million, weaker than the consensus of $507.3 million.

Maplebear Inc is down more than -12% after forecasting Q4 adjusted Ebitda of $230 million-$240 million, below the consensus of $244.4 million.

Rocket Cos is down more than -10% after forecasting Q4 adjusted net revenue of $1.05 billion-$1.20 billion, well below the consensus of $1.32 billion.

Caterpillar is down more than -1% to lead losers in the Dow Jones Industrials after Evercore ISI downgraded the stock to underperform from in line with a price target of $365.

Tesla is down more than -1% after Phillip Securities downgraded the stock to sell from reduce with a price target of $230.

Earnings Reports (11/13/2024)

Cisco Systems Inc (CSCO), Loar Holdings Inc (LOAR), NU Holdings Ltd/Cayman Islands (NU), Tetra Tech Inc (TTEK).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

The semiconductor sector has been on a remarkable rally in the past month. The expansion of artificial intelligence (AI) applications and the new monetary easing era led to a rally in semiconductor stocks. Additionally, a spate of stronger earnings reports from well-known players in the space added to the strength.

As such, VanEck Vectors Semiconductor ETF SMH, iShares Semiconductor ETF SOXX, Invesco PHLX Semiconductor ETF SOXQ, First Trust NASDAQ Semiconductor ETF FTXL and Strive U.S. Semiconductor ETF SHOC have gained 4.5%, 0.4%, 1.8%, 2.1% and 2.4%, respectively, in the past month.

Let’s dig into the individual earnings releases:

Semiconductor Earnings in Focus

Intel INTC, the world’s largest chipmaker, reported a loss per share of 46 cents, wider than the Zacks Consensus Estimate of a loss of 20 cents. Revenues declined 6% year over year to $13.28 billion and edged past the estimated $13 billion. For the current quarter, Intel guided revenues of $13.3-$14.3 billion and adjusted earnings of 12 cents per share.

Texas Instruments TXN reported solid third-quarter 2024 results. Earnings beat the Zacks Consensus Estimate by 11 cents but revenues lagged the same by $40 million. For the fourth quarter of 2024, the company expects revenues in the range of $3.70-$4.00 billion and earnings per share in the band of $1.07-$1.29.

Lam Research LRCX topped revenue and earnings estimates for first-quarter fiscal 2025. Earnings per share of 86 cents surpassed the Zacks Consensus Estimate by 6 cents, while revenues of $4.17 billion edged past the estimated $4.05 billion. For second-quarter fiscal 2025, the company expects revenues of $4.30 billion (+/- $300 million) and earnings per share of 87 cents (+/- 10 cents).

Taiwan Semiconductor Manufacturing TSM reported robust third-quarter 2024 results. The company reported earnings per ADR of $1.94, which outpaced the Zacks Consensus Estimate of $1.74. Revenues rose 36% year over year to $23.5 billion and were above the estimate of $22.72 billion. For the fourth quarter, the company expects revenues to grow 35% year over year to $26.1-$26.9 billion (read: Buy Taiwan Semiconductor-Heavy ETFs on Upbeat Earnings).

Advanced Micro Devices AMD reported earnings of 92 cents per share, beating the Zacks Consensus Estimate by a penny. Revenues of $6.82 billion edged past the consensus mark of $6.71 million. AMD expects fourth-quarter 2024 revenues of $7.5 billion (+/-$300 million).

At Qualcomm QCOM, fourth-quarter fiscal 2024 earnings per share of $2.69 surpassed the Zacks Consensus Estimate by 13 cents. Revenues of $10.24 billion edged past the estimate of $9.9 billion. The company projects revenues of $10.5-$11.3 billion and earnings per share in the range of $2.85-$3.05 for the first quarter of fiscal 2025.

ETFs in Focus

VanEck Vectors Semiconductor ETF (SMH)

VanEck Vectors Semiconductor ETF provides exposure to 26 companies involved in semiconductor production and equipment by tracking the MVIS US Listed Semiconductor 25 Index. It has managed assets worth $25.4 billion and charges 35 bps in annual fees and expenses. The in-focus six firms account for 33.4% share in the basket.

VanEck Vectors Semiconductor ETF is heavily traded, with a volume of around 6 million shares per day. It has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook.

iShares Semiconductor ETF (SOXX)

iShares Semiconductor ETF follows the NYSE Semiconductor Index and offers exposure to U.S. companies that design, manufacture and distribute semiconductors. It holds 30 securities in its basket, with the in-focus six firms collectively making up 33.4% of the assets.

iShares Semiconductor ETF has amassed $14.4 billion in its asset base and trades in a volume of about 3 million shares a day. The product charges a fee of 35 bps a year from investors and has a Zacks ETF Rank #1 with a High risk outlook (read: Leveraged ETFs for Longer-Term Investors).

Invesco PHLX Semiconductor ETF (SOXQ)

Invesco PHLX Semiconductor ETF tracks the PHLX Semiconductor Sector Index, holding 30 stocks in its basket. The in-focus six firms collectively make up a combined 28.6% share in the basket.

Invesco PHLX Semiconductor ETF has accumulated $510.2 million in its asset base. It charges 19 bps in annual fees and trades in an average daily volume of 405,000 shares. SOXQ FTXL has a Zacks ETF Rank #1.

First Trust Nasdaq Semiconductor ETF (FTXL)

First Trust Nasdaq Semiconductor ETF offers exposure to the most-liquid U.S. semiconductor securities based on volatility, value and growth by tracking the Nasdaq US Smart Semiconductor Index. FTXL holds 31 stocks in its basket, with in-focus six firms accounting for a combined 26.8% share.

First Trust Nasdaq Semiconductor ETF has accumulated $1.4 billion in AUM. The average trading volume is light at around 28,000 shares and the expense ratio is 0.60%. FTXL has a Zacks ETF Rank #1 (read: What Lies Ahead for Semiconductor ETFs: Boom or Gloom?).

Strive U.S. Semiconductor ETF (SHOC)

Strive U.S. Semiconductor ETF seeks broad market exposure to the U.S. semiconductor sector. It follows the Bloomberg US Listed Semiconductors Select Total Return Index and holds 32 stocks in its basket, with in-focus firms accounting for a combined 22.5% share.

Strive U.S. Semiconductor ETF has AUM of $81.4 million and charges 40 bps in annual fees. It trades in a volume of 27,000 shares per day on average and has a Zacks ETF Rank #1.

Zacks Investment Research

The S&P 500 Index today is up +0.08%, the Dow Jones Industrials Index is up +0.18%, and the Nasdaq 100 Index is down -0.08%.

Stock index futures recovered from overnight losses and are mixed. The broader market is climbing on a relief rally after US October consumer prices rose as expected. Stocks also found support, and T-note yields fell further on dovish comments from Minneapolis Fed President Kashkari, who said inflation is headed in the right direction and he doesn't think inflation is stuck above the Fed's 2% target. Weakness in chip stocks is weighing on the Nasdaq 100.

US Oct CPI rose +0.3% m/m and +2.6% y/y, right on expectations. Oct CPI ex-food and energy remained unchanged from Sep at +3.3% y/y, right on expectations.

US MBA mortgage applications rose +0.5% in the week ended November 8, with the purchase mortgage sub-index up +1.9% and the refinancing sub-index down -1.5%. The average 30-year fixed rate mortgage rose +5 bp to 6.86% from 6.81% in the prior week.

Stocks have rallied sharply over the past week, with the S&P 500, Dow Jones Industrials, and the Nasdaq 100 posting new record highs on speculation President-elect Trump will boost corporate profits through tax cuts and reduced regulation.

The markets are looking ahead to Friday’s report on retail sales that will be looked at to see if consumer spending is holding up. Oct retail sales are expected to be up +0.3% m/m, and Oct retail sales ex-autos are also expected to be up +0.3% m/m. Also, the Q3 earnings season is wrapping up, with more than 50 companies scheduled to report quarterly results this week.

Of the 85% of companies in the S&P 500 that have released Q3 earnings so far, 75% surpassed the estimates, slightly below the 3-year average. According to Bloomberg Intelligence, companies in the S&P 500 have reported an average +8.4% y/y increase in quarterly earnings in Q3, more than double the preseason forecast.

The markets are discounting the chances at 82% for a -25 bp rate cut at the December 17-18 FOMC meeting.

Overseas stock markets today are mixed. The Euro Stoxx 50 fell to a 3-month low and is down -0.43%. China's Shanghai Composite Index closed up +0.51%. Japan's Nikkei Stock 225 fell to a 1-week low and closed down -1.66%.

Interest Rates

December 10-year T-notes (ZNZ24) today are up by +11 ticks. The 10-year T-note yield is down -2.8 bp to 4.440%. T-notes are moving moderately higher after today’s US October consumer price report was right on expectations, easing inflation concerns. The benign CPI report boosted the chances of a 25 bp rate cut by the Fed next month to 82% from 62% before the report. Also, dovish comments from Minneapolis Fed President Kashkari gave T-note a boost when he said that inflation is headed in the right direction.

European government bond yields today are mixed. The 10-year German bund yield is up +0.3 bp to 2.365%. The 10-year UK gilt yield is down -2.7 bp to 4.472%.

ECB Governing Council member and Bundesbank President Nagel said core inflation is still quite high, and there are still noticeable price pressures, especially in services. He added that President-elect Trump's tariff plans could cost Germany 1% of GDP and could cause economic contraction.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 23% for a -50 bp rate cut at the same meeting.

US Stock Movers

Albemarle is up more than +7% after RBC Capital Markets raised its price target on the stock to$133 from $108.

Charter Communications is up more than +3% after agreeing to buy Liberty Broadband in an all-stock transaction.

Tesla is up more than +4% to lead gainers in the Nasdaq 100 on speculation the company will benefit from President-elect Trump’s policies and after Trump picked Tesla CEO Musk to lead the new Department of Government Efficiency.

Cava Group is up more than +15% after reporting Q3 restaurant comparable sales rose +18.1%, stronger than expectations of +12.4%, and raised its full-year restaurant comparable sales to +12%-13% from a previous forecast of +8.5%-9.5%, well above the consensus of +9.95%.

Rivian Automotive is up more than +22% after Volkswagen AG raised its investment plans in the company by $800 million.

Spotify Technology is up more than +9% after forecasting Q4 monthly active users of 665 million, stronger than the consensus of 660.73 million.

Pure Storage is up more than +4% after Oppenheimer & Co initiated coverage on the stock with a recommendation of outperform with a price target of $70.

Emerson Electric is up more than +1% after BNP Paribas Exane initiated coverage on the stock with a recommendation of outperform with a price target of $155.

Maplebear Inc is down more than -10% after forecasting Q4 adjusted Ebitda of $230 million-$240 million, below the consensus of $244.4 million.

Skyworks Solutions is down more than -4% to lead losers in the S&P 500 after forecasting Q1 revenue of $1.05 billion-$1.08 billion, weaker than the consensus of $1.09 billion.

Chip stocks are under pressure today to weigh on the overall market. KLA Corp is down more than -2% to lead losers in the Nasdaq 100. Also, ON Semiconductor , Lam Research , Texas Instruments , Micron Technology , Applied Materials , Analog Devices , and Qualcomm are down more than -1%.

Super Micro Computer is down more than -2% after saying it is unable to file its quarterly report on form 10-Q for the period ended September as it needs time to find a new auditor.

Groupon is down more than -28% after reporting Q3 revenue of $114.5 million, below the consensus of $118 million, and forecast full-year revenue of $486 million-$493 million, weaker than the consensus of $507.3 million.

Rocket Cos is down more than -12% after forecasting Q4 adjusted net revenue of $1.05 billion-$1.20 billion, well below the consensus of $1.32 billion.

Caterpillar is down more than -1% to lead losers in the Dow Jones Industrials after Evercore ISI downgraded the stock to underperform from in line with a price target of $365.

International Paper is down more than -1% after BNP Paribas Exane downgraded the stock to underperform from neutral with a price target of $48.20.

Earnings Reports (11/13/2024)

Cisco Systems Inc (CSCO), Loar Holdings Inc (LOAR), NU Holdings Ltd/Cayman Islands (NU), Tetra Tech Inc (TTEK).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

Court: S.D. California

Case: 3:17-cv-00121

Investors can still file a late claim to receive payment from the Qualcomm $75 million settlement.

In 2017, reports emerged that Qualcomm was overcharging for licenses and refusing to sell chips to companies that did not agree to their terms and causing stock to drop significantly.

Following this, Qualcomm was sued by shareholders and has agreed to settle by paying $75M to investors.

You can submit your claim and be notified of any further updates.

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.

The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.

Zacks Premium also includes the Zacks Style Scores.

What are the Zacks Style Scores?

The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value Score

Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.

Growth Score

While good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum Score

Momentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.

VGM Score

What if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank

A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.

#1 (Strong Buy) stocks have produced an unmatched +25.41% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Qualcomm (QCOM)

Headquartered in San Diego since 1985, Qualcomm is a fabless semiconductor company.

QCOM is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.

It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 14.7; value investors should take notice.

Seven analysts revised their earnings estimate higher in the last 60 days for fiscal 2025, while the Zacks Consensus Estimate has increased $0.14 to $11.11 per share. QCOM also boasts an average earnings surprise of 7.6%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, QCOM should be on investors' short list.

Zacks Investment Research