Qualcomm said Thursday that it would be renewing its deal with Apple, but the stock was dropping as the vague announcement left Wall Street with more questions than answers.
Qualcomm said in a news release that it was renewing its global patent license agreement with Apple, effective April 1, 2027.
"We are pleased to extend the Apple license agreement," John Han, executive vice president and general manager of Qualcomm Technology Licensing, said in the news release.
That was all that Qualcomm shared in the announcement, though, and that made some investors nervous.
Qualcomm stock was down 2.2% to $192.87 on Thursday.
Apple didn't immediately respond to a request for comment on the deal.
Bernstein analyst Stacy Rasgon wrote in a note that Qualcomm has previously shared more details in old deal renewals with Apple. In April 2019, Qualcomm said in a news release that the companies reached a six-year license agreement, including a two year option to extend.
"The lack of such specificity here gives us a little bit of pause," Rasgon wrote. He added that today's news is "an incremental positive of course, but [we] would be listening for any further comments (at earnings perhaps?) on duration and whether this is something we will once again have to worry about at some point."
Qualcomm makes cellular modems that go into iPhones. However, Apple has been trying to step away from its reliance on another company for the hardware that goes into its devices. That's better for margins.
The tech giant announced the launch of the iPhone 18 Pro, Pro Max, and Duo, earlier this month. All of those devices use a C2 modem built in house by Apple. That's a shift from last year when Apple's iPhone 17 lineup still used Qualcomm modems.
Qualcomm investors have been aware of this shift for quite some time now. The stock is still up 13% this year as shareholders have focused on the company entering into new partnerships with other tech giants. Shares rose 3.2% after Qualcomm announced a deal with Amazon.com.
Comments