Why Put Traders Are Piling on Qualcomm Stock

Put volume is running at nine times what is typically seen at this point

Deputy Editor
Aug 3, 2023 at 11:07 AM
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Semiconductor concern Qualcomm, Inc. (NASDAQ:QCOM) is plunging today, last seen down 10.6% to trade at $115.59. Today's drop follows a lackluster fiscal third-quarter report, with the company missing revenue expectations and issuing a softer-than-expected fourth-quarter outlook amid weak smartphone sales. Earnings, however, came in slightly above estimates.

Put traders are taking notice of the results. Already today, 76,000 bearish bets have already crossed the tape, which is nine times the intraday average volume. New positions are being bought to open at the top five most popular contracts, led by the weekly 8/4 115-strike put. 

The brokerage bunch is also weighing in. Deutsche Bank downgraded the equity to "hold" from "buy" and cut its target price to $120 from $130, while Susquehanna and J.P. Morgan Securities slashed their price objectives as well. Piper Sandler, CFRA, and Morgan Stanley all adjusted their price targets higher, however.

Coming into today, 15 of the 21 covering brokerages rated Qualcomm stock a "buy" or better. Meanwhile, the 12-month consensus target price of $137.79 is an 18.9% premium to current levels.

Today's bear gap puts QCOM back below a recent safety net at its 50-day moving average. Down 22.4% over the last 12 months, Qualcomm stock still sports a 5.3% year-to-date lead.


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