Huawei said, “move over.”
This Chinese vendor just took top place.
Huawei became the biggest smartphone player in the world in the second quarter for the first time in history -dethroning Samsung. The Chinese producer shipped out 55.8 million devices while Samsung totaled 53.7 million.
When you look back on the last year, despite Huawei’s ascending to the top – both smartphone producers are down in production. But Huawei’s 5% reduction versus Samsung’s 30% is something to be impressed by. To put it simply: Huawei found a way to continue business as usual despite the global pandemic impacting the world.
Analysts doubt whether this first place spot is sustainable given the U.S.’s recent sanctions against the company. Huawei sold over 70% of its smartphones in mainland China in the second quarter. Meanwhile, smartphone shipments in international markets plunged 27% year-on-year in April to June quarter.
But while everyone focuses on the recent Huawei news – and debating whether the company can keep up with these kinds of numbers – I’ve got my eye on something else.
Where’s the money?
Recently, Qualcomm reached a settlement with Huawei after a long negotiation. The settlement includes money owed to Qualcomm from previous quarters and a new long-term, global patent-license agreement. On top of the money owed, Qualcomm will also have a multiyear license agreement with every major handset original equipment manufacturer.
This is big news. And here’s why.
Qualcomm expects unadjusted fiscal fourth-quarter earnings of $2.12 to $2.32 a share on revenue of $7.3 billion to $8.1 billion, well ahead of analysts’ estimates. To put it in simple terms: we’re looking at a significant surge in profit and revenue.
Here’s how you can play this surge to your advantage.
How can I get some?
Once this news hit the airwaves, Qualcomm shares surged as much as 14% after hours. The following day, the stock saw a 1.7% increase in the regular session on Wednesday to close at $93.03 and eventually hit a new high of $106.
So, there’s no denying the Qualcomm is posting unreal numbers and the options market was implying a $5 move, and it ripped through levels it hasn’t seen in decades. But don’t get caught up in these groundbreaking trends.
As we’ve discussed before, buying a stock on its high isn’t the best plan of action, and neither is trading on the headlines.
But the recent breakout Qualcomm has had is giving me a strong buy signal – but I’ll be looking to buy this hot-shot stock on a pullback – and you should too.
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Before You Go…
As I mentioned above, once the news broke of the settlement with Huawei, Qualcomm’s share price jumped.
Those in the know were able to take advantage of this, but by the time most other individual investors heard about it, it was too late.
One of the main goals I had in mind when I created my S.C.A.N. trading algorithm was to be able to help myself and my readers pinpoint opportunities like this – BEFORE the lion’s share of the profits have already been made!
This algorithm, which is the crux of my Project 303 trading service, examines past data points, current trends, and future projections to alert my readers of their best chances for profits across all markets.
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