Chip manufacturer Qualcomm (QCOM) (GB:0QZ3) has joined hands with social media giant Meta Platforms (META) for the production of custom chips. Under the multi-year agreement, Qualcomm will provide custom chips for Meta’s Quest VR headsets.
The announcement came at a consumer electronics conference in Berlin today and teams from both companies are expected to work together to develop the chips, which will use Qualcomm’s Snapdragon XR platforms.
While financial terms remain undisclosed, the chips (which won’t be exclusive to Meta) will be optimized for the Quest headsets. With this move, Meta continues to forge ahead in its Metaverse journey.
Qualcomm, on its part, has already supplied chips for the Oculus Go and Meta Quest 2. It has most recently agreed to make chips for Microsoft’s AR smart glasses.
The Founder and CEO of Meta, Mark Zuckerberg, said, “Unlike mobile phones, building virtual reality brings novel, multi-dimensional challenges in spatial computing, cost, and form factor. These chipsets will help us keep pushing virtual reality to its limits and deliver awesome experiences.”
Is Meta a Good Stock?
Loop Capital market’s Rob Sanderson has reiterated a Buy rating on Meta while decreasing his price target on the stock to $165 from $180. Overall, analysts have a Moderate Buy consensus rating on META stock with an average price target of $224.21, indicating a 35.59% upside.
Qualcomm Is Being Sued
In another development, Qualcomm and Nuvia have been sued for license violations in a federal district court of Delaware by Softbank-owned Arm.
Arm, which designs semiconductors, has accused Qualcomm and Nuvia of violating its licenses. Arm has now asked Qualcomm and Nuvia not to infringe its trademarks, and stop the use of and destroy the relevant technology. The company has also asked for compensation for the infringement.
What Is QCOM Stock’s Price Target?
QCOM’s average price target of $189.85 indicates 46.13% upside potential for the stock. Overall, the Street is cautious but optimistic about Qualcomm, which carries a Moderate Buy consensus rating.
While Mark Zuckerberg’s Meta continues to make strides in the metaverse space, Qualcomm is expanding its expertise and offerings in virtual reality. The substantial double-digit upside seen by analysts in these stocks is icing on the cake for investors.
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