Call of the Day: QUALCOMM, Inc. (QCOM) Kicked out of the ‘Conviction Buy’ List

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QUALCOMM, Inc. (NASDAQ:QCOM) received a major setback after Goldman Sachs Group Inc. (NYSE:GS) stripped it out, of its ‘Conviction buy list’ after a 17% run, consequently lowering its June-and September estimates citing lower than expected mobile phone demand. The biggest question on ‘Call of The Day’ on CNBC was whether it was time to take profits out of the company while awaiting to see the impact of the downgrade.

QUALCOMM Incorporated

Jon Najarian on his part said he believed the wrong doing in QUALCOMM, Inc. (NASDAQ:QCOM) comes; as a result, of two diverse focus, instead of shifting attention into one market that has the potential to generate great returns. Broadcom Corporation (NASDAQ:BRCM) remains the best pick for Najarian based on the fact that the company is exiting a market that it is not doing well to focus on more profitable markets.

“I really, preferred Broadcom because of what they are doing to exit a market they don’t want to concentrate on anymore and Intel,” Said Mr. Najarian.

Stephanie Link downplayed QUALCOMM, Inc. (NASDAQ:QCOM) on the basis that she was not a fan of the royalty revenue risk reiterating her long position on Xilinx, Inc. (NASDAQ:XLNX). Mike Murphy on the hand reiterated his dislike for Qualcom but disagreed with the call saying he believes there are a lot of tailwinds behind Qualcom because the entire industry is at the moment doing well.  Mr. Murphy expects the stock to improve if the space goes higher in the coming months.

“If you pull-up a chart on Qualcomm you will see that the  stock has about a double or triple top there  that if it breaks above that it gets more legs, so if the space stays strong I think the stock goes higher,” said Mr. Murphy.

Rick Santelli believes QUALCOMM, Inc. (NASDAQ:QCOM) being booted out of the ‘Conviction buy list’ was a strategic call considering it has outperformed the S&P since November and still has a buy rating. Despite being a market multiple, Mr. Santelli does not think Qualcomm is a leverage play in the sector.

Disclosure: none

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