Is QUALCOMM, Inc. (QCOM) in Trouble?

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A sharp fall in QUALCOMM, Inc. (NASDAQ:QCOM)‘s price has raised eyebrows as to the reasons behind it and whether the stock is going to recover or continue to dive.  Guy Adami, co-anchor of CNBC‘s Fast Money commented on this decline and said that the bullish outlook for the stock would be to hope that it holds at $72.

QUALCOMM Incorporated

“That’s the stock that went from $82 to $72 in about three or four trading days. That’s a huge move. We obviously now have a balance at $75.06. Now it’s seemingly this continuation of this weakness, so Qualcomm here scares me,” Adami said.

Some commentators advised to look for other alternative investments such as SanDisk Corporation (NASDAQ:SNDK) and Micron Technology, Inc. (NASDAQ:MU), which are showing much brighter prospects than QUALCOMM, Inc. (NASDAQ:QCOM)  and have been holding their turf in the last eight months which saw boom and bust of many new tech stocks. On the other hand, others like CNBC’s Timothy Seymour and Melissa Lee pointed out that this drop in QUALCOMM, Inc.(NASDAQ:QCOM)’s stock price  might very well be the result of investors and traders rotating their positions after the labour day.

This view transpired in light of an overview of the iShares S&P NA Tec. Semi. Idx. Fd.(ETF) (NASDAQ:SOXX) to gauge the outlook of the semiconductor industry as a whole. The Exchange-traded fund has been up 20.4% since January as compared to  the S&P 500 (INDEXSP:.INX), which is up only 8% in comparison.  Hence, Seymour explained that the overall semiconductors sector was doing pretty well. Furthermore, he cited the example of Intel Corporation (NASDAQ:INTC) which is also a large cap tech chipmaker  like QUALCOMM, Inc. (NASDAQ:QCOM) and its stock price just recently went up from $24 to $36 in just six months. He added that these companies have reasonably good evaluations with decent growth prospects, therefore the current drop in stock price means little in gauging the health of QUALCOMM, Inc. (NASDAQ:QCOM) .

“[…] If you are in an environment where there is inflation fear, semis [semiconductors]should do pretty well. They are efficient, they are inflation protective etc. etc. […],”  Seymour added.

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