QUALCOMM Incorporated stock jumped nearly 4% on Monday after the chipmaker inked a deal with Apple Inc. (NASDAQ: AAPL) to supply the iPhone maker with 5G communications chips through 2026. This pact comes as Apple reevaluates and postpones its in-house production plans.
Per the agreement, QUALCOMM Incorporated (NASDAQ: QCOM) will become the exclusive supplier of Snapdragon® 5G Modem‑RF Systems for iPhones over the next three years. Earlier this year, Qualcomm’s CEO, Cristiano Amon, hinted at not supplying Apple with modems by 2024, making this new agreement a pivotal turn of events.
In a presentation to investors on Monday, Qualcomm disclosed that the terms of this agreement remain consistent with previous arrangements between the two tech giants. The patent license agreement, inked in 2019, remains unaltered. Furthermore, Qualcomm expects to contribute 20% of the chipset supply for Apple’s 2026 smartphone launch.
This news follows recent commentary by Rosenblatt Securities analyst Kevin Cassidy, who noted Apple’s modem technology lagged behind the competition, with Qualcomm maintaining its lead and better technology.
Last week, a report of Chinese government officials being banned from using iPhones briefly affected Apple and Qualcomm stocks. However, the consequences of this ban on Apple’s overall sales in China appear to be minimal, considering the tech giant robust global presence. Furthermore, Apple is confronting heightened regulatory scrutiny in the Eurozone.
QUALCOMM Incorporated stock closed the Monday trading session at $110.28, representing a 3.90% increase compared to the Friday trading session.