The market has not yet fully adjusted the price of Qualcomm stock after its settlement with Apple last week, Morgan Stanley analysts wrote a note on Tuesday.
Some analysts believe Qualcomm won the dispute Apple ended up paying Qualcomm one-time payment that has been estimated to be in the billions of dollars and I bought a license to those patents nd modem chips direct from Qualcomm at a price estimated to be $ 8 or $ 9 per phone.
"The Apple agreement structure is very consistent with what we thought should be (Apple paying meaningful by phone royalty and returning to use Qualcomm modems ), "the Morgan Stanley analysts wrote. "However, we were surprised that Apple chose to settle now and return to what we estimated was roughly the status quo; instead, we expected Apple to wait for the courts to negotiate leverage."
One big reason for the Qualcomm bull case is that Morgan Stanley analysts said that Qualcomm is the "key enabler" or next-generation 5G networks. Qualcomm's choke on 5G modems is one reason Apple settled – otherwise it might have been late to release a 5G iPhone, which is expected in 2020.
The analysts added: "We think Qualcomm's new horizons in 5G opportunities are relatively cheap / free options post Apple settlement, Qualcomm enjoys a range of underappreciated options outside handsets that have the potential in the long run to make the largest semiconductor company in the world. "