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An investment in Qualcomm is 'dead money,' says top chip analyst
Qualcomm (NASDAQ: QCOM) shares slid Thursday despite the company reporting better-than-expected earnings the day before — and a top semiconductor analyst said there is little to no incentive for investors to buy the stock.
"At best I think it's probably dead money," Bernstein analyst Stacy Rasgon told CNBC on Thursday.
Rasgon said the company's biggest problem is its legal dispute with Apple, which began with a $1 billion royalty dispute in January .
"It's a massive revision in terms of profits. I don't see that Apple has any incentive to settle at this point. Qualcomm doesn't really seem to be holding any cards," he said on " Fast Money: Halftime Report ."
Rasgon rates the stock market perform with a $60-per-share price target — roughly $6 higher than where it traded midafternoon Thursday.
"I mean, if you're buying [Qualcomm] today, you're buying it probably for one of two reasons, either you're expecting a resolution to the licensing dispute sometime soon in a form that does not significantly impair the current business, or you're buying it for the NXP," Rasgon said. (Qualcomm agreed to buy semiconductor company NXP (NASDAQ: NXPI) last year, but the deal has yet to close.)
Rasgon admits to being negative on the stock for a while. "Every time I think it's as bad as it can get they keep surprising me," he said.
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