Shares of QUALCOMM, Inc. look set to resume their uptrend. QCOM Stock is a very attractive buy at these levels. Here's why.

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Shares of San Diego, California-based Qualcomm (Nasdaq:QCOM) look set to continue their uptrend after gaining more than 5% in the last 5 days alone. This has been the best period for QCOM stock since it had been battered badly due to the FTC charges and Apple Inc.'s (Nasdaq:AAPL) lawsuit last month. Qualcomm reporting mixed Q1-2017 earnings also did not help its cause. In one of our previous posts, we had discussed the lawsuit risks associated with Qualcomm stock and its prospects as a value buy. Meanwhile, we have seen a number of announcements and disclosures about Qualcomm's various offerings, which have been very impressive. With QCOM on a recovery path of late, should you buy QCOM stock now? Is this a false dawn? Let's take a closer look.

Something More On Qualcomm's Legal Issues.

Qualcomm has officially sought a stay over the South Korea Fair Trade Commission's $873M fine with the legal deadline expiring on Feb 22nd. A Bloomberg post also reports that Qualcomm has claimed that the Samsung scandal weakens the case against it in the Korean antitrust ruling. The post highlights the investigation of Samsungs influence on KFTC and has questioned Kim Hak-hyun, who was the then chairman of KFTC when the regulatory body imposed the fine on Qualcomm. To quote Qualcomm's General Counsel, Don Rosenberg: "The incorrect decision is the product of an unfair process that we believe was heavily influenced by commercial interests. The recent reports about the special prosecutor’s investigation into Samsung’s connection to the former Vice Chairman of the KFTC, who oversaw our case, has increased our level of concern." Qualcomm's legal team's ability to defend the chipmaker in the antitrust case by attaching "broader alleged influence" could substantially work in their favor, though KFTC spokesperson has denied any foul play there.

Another example of Qualcomm's legal trouble easing is an argument presented by a recent MarketWatch post about the FTC case being dropped by the Trump administration which seems very reasonable. To quote the post: " hundreds of millions of tax dollars are at stake, believes Morgan Stanley analyst James Faucette. Qualcomm pays most of its taxes in the U.S., whereas Apple earns a lot of its income abroad. Shifting profits to Apple from Qualcomm by ruling against Qualcomm would reduce taxes paid to U.S. federal, state and local governments, notes Faucette." There are arguments against Qualcomm as well, but as days pass by and things get much clearer, it seems things are not as gloomy for the world's largest smartphone chipmaker. Investors seem to have overreacted to Qualcomm's legal woes.

Qualcomm Is All Set To Ride The IoT Bandwagon.

The San Diego-based component maker is taking the lead to capture the booming IoT opportunity. A latest BusinessInsider research suggests that there will be an investment of "$6 trillion in IoT between 2015 and 2020, which will yield $12.6 trillion ROI over the next decade." The BI research also "expects that more than 24 billion IoT devices will be installed globally in 2020, and the vast majority of these will fall into the small, low-power category." Qualcomm has stepped up its efforts to capture the massive opportunity in front of it by its latest moves. The world's largest smartphone chipmaker has announced its IoT chips "with support for Android Things OS, integration with Amazon Web Services, and two systems-on-chips that aggregate a bevy of standards." A number of Qualcomm's offerings are being showcased at Mobile World Congress in Barcelona later this week. It is also known that Qualcomm is "first to add support for Google's Android Things OS on its 4G LTE processors". As a ZDNet post puts it Qualcomm wants to "Be the Swiss Army processor for IoT deployments." All these advancements are from Qualcomm alone, and once the NXP Semiconductor (Nasdaq:NXPI) acquisition is over, the chipmaker's IoT portfolio will become very diverse and large, to tap the Multi-billion dollar opportunity.

It looks like Qualcomm may give Intel for a run for its money in the PC-Tablet market as well. A recent Wccftech post reports that "Qualcomm’s Snapdragon processors might make it on Windows 10 PCs claims Chinese supply chain. Sources report that manufacturers have already started on Windows 10 PCs. These will become available in the second half of this year. The report goes on to further suggest that testing on the Snapdragon 820 for Windows 10 with 4GB RAM is able to run Edge, HD video, directional filters and background multi-tasking." We all know Qualcomm had a tie up recently with Microsoft (Nasdaq:MSFT) to develop Windows 10 based PCs on ARM chips. Though the above reports are speculations but the things seem to be in line with Qualcomm's plans for diversification with sluggish smartphone sales worldwide.

Putting It All Together

Qualcomm has one of the best patent portfolios in the communications industry. The chipmaker still outspends its peers in mobile chip development and Qualcomm has tried to improve the efficiency of its R&D spending by cutting down on R&D lately. Qualcomm's product line-up highlights the immense growth opportunities ahead of it irrespective of the risks pertaining to its licensing business. We can expect more insight into Qualcomm's future growth opportunities at Mobile World Congress in Barcelona later this week. Investors seem to have reacted with a knee-jerk reaction to Qualcomm's legal woes. Apart from its growth opportunities, QCOM stock offers an added advantage of regular stock buybacks and a healthy dividend yield of nearly 4%. QCOM at these levels looks very cheap given its growth opportunities. Qualcomm stock is a buy at these levels, risks due to legal woes persist but they seem to be priced in. Long-term investors should consider going long on QCOM stock.