Qualcomm's Stock Jumps After J.P. Morgan Upgrade

Shares of Qualcomm Inc. rallied 1.4% in premarket trade Monday, after the wireless technology and chip maker was upgraded to at J.P. Morgan, which cited improved valuation and optimism over the upcoming closure of the NXP Semiconductors NV acquisition. Analyst Rod Hall raised his rating back to overweight, after being at neutral since for the past five months, and established a $68 stock price target, which is 18% above Friday's closing price. He said that while he expects more negative news regarding the dispute with Apple Inc. , he views the stoppage of royalty payments by Apple contract manufacturers as a major milestone. "Though volatility in the shares could remain high through the summer we see the valuation gap as too large to continue to ignore with the [NXP Semiconductors] closure approaching," Hall wrote in a note to clients. "We advise investors to add to positions at current levels." The stock had rallied 9.8% since closing at a 9 1/2-month low of $52.50 on April 21 through Friday, but was still down 11.6% year to date. In comparison, the PHLX Semiconductor Index has run up 17.0% and the S&P 500 has gained 6.4%.

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