Qualcomm (QCOM) has entered into a strategic technology partnership with Ferrari (RACE). The arrangement will see Qualcomm help accelerate the Italian luxury sports car maker’s digital transformation. Qualcomm stock rose 2% to $178.59 on Tuesday. With a dividend yield of 1.51% compared to the sector average of 0.69%, Qualcomm is among the highest yielding stocks in its sector.
Qualcomm builds semiconductor chips used in a wide range of products, from smartphones to vehicles. It also runs a patent licensing business.
Ferrari Digital Cockpit
Ferrari will use Qualcomm’s Snapdragon Digital Chassis, a suite of automotive technologies, to power its next-generation cars. The Digital Chassis comprises telematics and ADAS (advanced driver assistance systems) functions to deliver immersive digital experiences and enhanced safety.
Qualcomm will help Ferrari build a digital cockpit for Ferrari cars. The type of auto solution that Qualcomm is bringing to Ferrari allows for ongoing updates throughout the vehicle’s lifetime.
“We are excited to see our automotive technology leadership play an integral role in this new strategic relationship with Ferrari…We look forward to helping shape what the future holds as we work together to bring world-class driving experiences to their customers,” commented Qualcomm CEO Cristiano Amon.
Ferrari CEO Benedetto Vigna said, “We believe innovation requires market leaders working together…thanks to this agreement…we expand our knowledge in digital technologies and web 3.0 areas with great potential for automotive and motorsport.”
F1 Team Sponsorship
In addition to providing the technologies to power Ferrari’s smart cars, Qualcomm has also secured a sponsorship deal with the sports car manufacturer. It has joined as a premium partner of Ferrari’s racing division, the Scuderia Ferrari Formula 1 team. As a result, Ferrari’s F1-75 single-seater car will feature Qualcomm’s Snapdragon brand at the 2022 Formula One World Championship racing events.
Bernstein analyst Stacy Rasgon recently reiterated a Buy rating on Qualcomm stock and raised the price target to $250 from $225. Rasgon’s new price target suggests 39.99% upside potential.
Consensus among analysts is a Moderate Buy based on 14 Buys and 7 Holds. The average Qualcomm price target of $215.40 implies 20.61% upside potential to current levels.
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