Jim Cramer’s Latest Game Plan: 15 Stocks to Watch

2. QUALCOMM Incorporated (NASDAQ:QCOM)

Number of Hedge Fund Holders: 100

Cramer mentioned that QUALCOMM Incorporated (NASDAQ:QCOM) is set to report its earnings on November 6 and highlighted chatter around its plan to buy Intel.

“… Qualcomm reports at the same time. Now, there have been stories floated about how CEO Cristiano Amon has been interested in buying Intel. Intel. They wanna buy ’em. I think he has to move fast because, after the quarter Intel reported yesterday, that stock’s going higher, regardless of whether it’s been booted from the Dow like it was this evening. Qualcomm itself is quite charmed. It tends not to go down on weak numbers and it soars on strong ones. Wow, that’s a very good risk reward, isn’t it?”

QUALCOMM (NASDAQ:QCOM) is a key player in the wireless industry, focusing on the development and commercialization of essential technologies, including integrated circuits, software, and licensing of intellectual property.

A significant legal challenge arose when Arm Holdings filed a lawsuit against Qualcomm in 2022, following Qualcomm’s acquisition of Nuvia. This legal dispute primarily concerns Qualcomm’s alleged failure to negotiate a new licensing agreement after the acquisition, which has critical ramifications for the future of its chip designs.

Arm claims that technology developed for Microsoft’s Copilot+ laptops is based on Nuvia’s chip architecture, a point of contention that has escalated tensions between the two companies. Additionally, Bloomberg News reported that Arm intends to cancel an architectural license agreement that permits Qualcomm to utilize Arm’s intellectual property in its chip designs. This cancellation, for which Qualcomm was given a 60-day notice in October, could severely impact Qualcomm’s operations.

The chip division is a substantial contributor to the company’s revenue, and its growth has outpaced that of the licensing segment. Without the architectural license, the company will face many difficulties regarding the sales of many new chip products.

As reported by Reuters in September, QUALCOMM (NASDAQ:QCOM) has been considering acquiring parts of Intel’s design business. This interest comes as Intel faces challenges in generating cash and seeks to divest certain segments. While specific details remain unconfirmed, sources indicate that the company is particularly focused on Intel’s client PC design division, among other potential design units.