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Qualcomm (QCOM – 93) got a shot in the arm yesterday when it was announced that China plans to use QCOM's CDMA technology to deploy their huge wireless network. This has been an "on-again-off-again" proposition for months. The difference is that China has actually signed a memorandum of intent, although there is still no formal contract.
After outpacing every other stock in the Nasdaq last year, QCOM faced a tough market in 2000, falling from a high of 200 in January to the low 50s in July. The stock quickly picked up steam in early November when it announced solid earnings and a favorable settlement in its patent dispute with Nokia (NOK – 47-11/16). QCOM shares moved from 67-3/4 to 90 in just one week, then settled into a trading range and were not able to overcome the 91-3/8 mark.
Last night in after-hours trading, the stock shot past 93 and appears to be holding onto these gains in early trading today. Adding more fuel to the fire, early today the company revealed another new product development and a licensing program for start-up companies.
Options activity heated up in QCOM's December call series yesterday, with 2,577 December 80 calls, 3,822 December 90s, and 5,465 December 100s changing hands. This boosted open interest on these options to 6,918, 9,270, and 10,738 contracts, respectively.