China Doesn’t Like How Much Money QUALCOMM Inc (QCOM) Makes: Jim Cramer

QUALCOMM, Inc. (NASDAQ:QCOM) has passed through a spiky quarter with problems creeping in from every direction. The company’s down almost 11.5% and the day is not even over yet, so it might see a price lower than the current almost $68.4. The company faces regulatory investigation in both United States and European Union, and is confronting with pricing pressures in China, where many small companies are appropriating the Snapdragon technology without paying QUALCOMM, Inc. (NASDAQ:QCOM), according to CNBC.

“That was a tough conference call and this is one of those calls where I kind of hear the wheels grind that China doesn’t like how much money QUALCOMM, Inc. (NASDAQ:QCOM) makes. So, you have a story where the numbers weren’t as good, where average selling price is coming down for the handsets,” said Jim Cramer.

It’s highly unlikely that QUALCOMM, Inc. (NASDAQ:QCOM) will manage to negotiate with the Chinese government so that the licensing contracts will be fully enforced. Then there’re pressures on the company because it’s in an almost monopolistic position worldwide. Nevertheless, it doesn’t seem that bad a performer to lose Jim Cramer’s trust in the company.

“NXP Semiconductors NV (NASDAQ:NXPI), which has the chip for their credit cards said things were very good. Sierra Wireless, Inc. (USA) (NASDAQ:SWIR) said things were very good. I don’t want anyone drawing conclusion that cell phones are weak because of QUALCOMM, Inc. (NASDAQ:QCOM),” uttered Cramer.

Meanwhile, Intel Corporation (NASDAQ:INTC) is trying to take a grip on some Chinese market share through helping small companies in the region building up chips on their own. So, it looks like a global conspiracy against the company that has been powering most of the best-selling devices around. Also, QUALCOMM, Inc. (NASDAQ:QCOM) missed out on Apple Inc. (NASDAQ:AAPL) very much, as the latter is the only company that has great margins combined with astronomical sales’ figures, a unique advantage which no other company managed to produce and sustain.

Disclosure: none
Free Report: Warren Buffett and 12 Billionaires Are Crazy About These 7 Stocks

Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.