Analysts continue to debate the significance of Taiwanese phone maker HTC (2498TW) having announced last wednesday it cut its revenue outlook this year on rising competition and global macroeconomic distress.
A couple of the Street’s chip watchers today have concluded there shouldn’t be too much risk to HTC supplier Qualcomm (QCOM).
Canaccord Genuity’s Mike Walkley reiterates a Buy rating on Qualcomm shares and a $74 price target, writing that HTC’s troubles are “more company-specific than overall weakness in smartphone sales.”
“Our checks indicate HTC has lost significant share at leading customer Sprint to both the iPhone and Samsung Galaxy S II and at Verizon to the iPhone and Motorola Mobility (MMI)�Bionic/RAZR LTE smartphones,” writes Walkley.
He expects Qualcomm will see rising share of phone chips for its “MSM” chipsets from multiple vendors through this year and next.
Meantime, Wells Fargo’s David Wong reiterates an Outperform rating on Qualcomm and a $59 to $68 “valuation range.” Wong added the stock to Wells’s “Priority Stock List,” along with Intel (INTC), which he also rates Outperform.
“We are highlighting Qualcomm and Intel because we believe that over the next few years these two companies will be the dominant forces driving some important chip trends related to mobile computing and computer infrastructure,” writes Wong.
“We think Qualcomm will be able build its leadership in baseband processors for wireless handsets (in particular, smartphones), and that it is also likely to emerge as the major force in ARM Holdings- (ARMH) based applications processors for wireless handsets and tablets.”
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