Shares in U.S. chipmaker Qualcomm (QCOM) were stronger today as hopes continued to grow that a $1.4 billion takeover of U.K. semiconductor IP firm Alphawave was moving closer.
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Put Up or Shut Up
QCOM stock was up 2.2% in pre-market trading after Alphawave IP Group said the U.K. takeover panel had agreed to yet another extension of the deadline for a formal “put up or shut up” takeover bid from May 27 to June 2. This followed two previous extensions – first from April 29 to May 12 and then from May 12 to May 27.
Alphawave said it and Qualcomm remain engaged in discussions in respect of a possible offer.
It was back in April that Qualcomm first confirmed that it was considering making an offer. No price has been mentioned to date, but the market value of Alphawave, which is listed in the U.K., currently stands at around £1.1 billion or around $1.4 billion.
AI Arsenal
Alphawave shares rose 8% today although there is still no certainty that a firm offer will be made.
Alphawave makes a crucial technology, known as “serdes”, used in the building of AI processors. A move to acquire Alphawave would not only help Qualcomm build up its AI technology arsenal but may also be crucial in solidifying its partnership and supply base in these times of trade and economic uncertainty.
In a note today five-star TipRanks-rated analyst Samik Chatterjee of J.P. Morgan said that the acquisition would bolster Qualcomm’s capabilities in the data center market, particularly in expanding its reach in data center connectivity IP. It would also complement its previous acquisition of Nuvia for data center CPU and AI inference chip design.
Is QCOM a Good Stock to Buy Now?
On TipRanks, QCOM has a Moderate Buy consensus based on 8 Buy, 8 Sell and 1 Hold rating. Its highest price target is $245. QCOM stock’s consensus price target is $178.31 implying an 22.65% upside.
