Qualcomm stock bucks trend on two analyst reports: Upgrades send chip vendor’s shares rising

Whether an element of schadenfreude-pleasure at another’s misfortune-has played a role in Qualcomm Inc.’s depressed stock value, no one can say.
But two analysts this week took a careful look at Qualcomm’s future and upgraded their rating of its stock, which ticked up more than a dollar today to $42.18 while most tech stocks languished.
JP Morgan analyst Ehud Gelblum raised his rating based on his view of Qualcomm’s future chip business, its research-and-development spending and its product lineup. Gelblum also forecast that Qualcomm and Nokia Corp. will reach an agreement during ongoing arbitration that will likely produce a new royalty rate that Nokia pays Qualcomm-about 2% to 2.5%, or half the 4% to 4.5% rate the handset giant paid under an agreement that expired in April.
Qualcomm’s revenue derives from both chip sales and intellectual-property license royalties.
Stifel Nicolaus’ Blair Levin was more restrained. He suggested that two European court victories for Qualcomm on procedural grounds related to Nokia’s charges of patent exhaustion in Europe might be a sign that court rulings are beginning to break in the chip giant’s favor. In a Santa Ana, Calif., court case that pitted Qualcomm against rival Broadcom Corp. over a video compression patent, a recent, precedent-setting ruling will probably save Qualcomm millions of dollars in damages in a case it lost. The situation may result in a new trial.
Levin characterized Qualcomm’s future fortunes as a result of its “litigation mosaic,” and implied that the sum of the parts might not be as dire as commonly perceived.
“The evolving win-loss record determines Qualcomm’s relative negotiating strength as its licensees-customers and competitors-push for better terms, but the courts take each individual case on its own terms,” Levin wrote.