Qualcomm Guides Higher and Goes Nowhere

I wrote an earlier article on why Qualcomm is in trouble. It is here.

In the meantime, the company got a temporary reprieve in its patent case against Broadcom. That was good for a couple of points.

The company today guided its current quarter earnings to 52 to 53 cents which is above the 50 cents the street is estimating and its previous guidance of 49 cents. Yet, investors quickly realized that the company was able to show this growth not from a top line improvement, but from a lower tax rate and the removal from the market of 30 million shares. The stock was down 65 cents.

Qualcomm is a massive company with many different growth drivers, but I still feel that its prognosis is very dimm as a result of the patent challenges that its chip business faces and the reality that WiMAX is a disruptive technology that will impact CDMA.

Alvarion has had a good run, but it is not too late to rotate into it from Qualcomm.