Trump Squashes Biggest Tech Deal Ever

Hello traders everywhere. Late Monday, President Trump signed an executive order blocking Broadcom’s $117 billion bid for the chip maker Qualcomm, citing national security concerns. This action indicates that he is willing to take extraordinary measures to remain on course with his administration’s increasingly protectionist stance.

The Broadcom acquisition would have been and was labeled as the most significant tech deal ever and would have made Broadcom the dominant supplier of chips used in smartphones. It would have also brought the company to the forefront of developing technology for the next generation of mobile network technology known as 5G.


The NASDAQ had opened at record highs before news of the block had sunk in, but once it did the NASDAQ soon retreated into negative territory on the day trading as low as .9% on the day.

Shares of Broadcom Limited (AVGO) are trading up on the day around 1% while shares of QUALCOMM Incorporated (QCOM) are trading down about 4% on the day.

Overall the stock market has been waffling the last few days trying to get a grasp on inflation, the looming trade wars and the firing of Rex Tillerson today by President Trump.

Key Levels To Watch This Week:

S&P 500 (CME:SP500): 2,647.32
Dow (INDEX:DJI): 24,217.76
Gold (NYMEX:GC.G18.E): 1,313.80
Crude Oil (NYMEX:CL.J18.E): 62.33
U.S. Dollar (NYBOT:DX.H18.E): 88.86
Bitcoin (CME:BRTI): 8,664.30

Every Success,
Jeremy Lutz and

Buy Qualcomm (QCOM) While It’s Cheap


QCOM Chart

On July 23rd of this year, shares of Qualcomm (NASDAQ:QCOM) stock were quoted at $81.97, representing the highest price they've reached all year. At the time, its P/E ratio was just north of 20. In an overpriced market, for a company of Qualcomm's caliber - whose double digit earnings growth is projected to hold steady in the long term - one would logically think it was a rare bargain at the time.

But the way in which QCOM's priced has moved in recent months has been largely devoid of logic. On Friday, December 12th, the stock closed at $70.59, just 4% above its 52-week low. The price is indicative of a 14% drop which occurred within just 5 months of hitting its high point. That’s a 34% annualized drop in price.

Speculation Has Been Hurting QCOM's Stock Price

...But for any well-known stock, speculative-based price movements never seem to hold steady in the long term.

Whenever a company has at least some level of earnings growth, its stock becomes an attractive target when its price takes a large enough dip to push it into value territory. In the case of QCOM, this would apply at its current price level. Continue reading "Buy Qualcomm (QCOM) While It’s Cheap"