Wireless Stocks Rally Ahead of Expo
Wall Street went hunting Monday for potential bargains among wireless telecommunications stocks in advance of a big industry trade show that kicks off today.
Shares of Qualcomm, the San Diego-based wireless technology giant, enjoyed one of the day’s better rallies: The stock (ticker symbol: QCOM) jumped $7.88, or 16%, to $58.19 amid optimism that Chief Executive Irwin Jacobs will reiterate the company’s recent positive forecasts when he speaks today at the Las Vegas trade show.
The Barclays index of 19 wireless-related stocks rose 4.6% on Monday after falling Friday to its lowest level since 1999.
More than 30,000 people and 700 exhibitors are expected to take part in the wireless industry show, which has grown so rapidly in the last few years that the Cellular Telecommunications and Internet Assn. decided to hold it in Las Vegas for the first time.
The gathering may not demonstrate the same wide-eyed enthusiasm as a year ago, when Wall Street’s exuberance for anything tech or telecom was intact.
Then again, the banter about “smart phones,” mobile Internet access and Bluetooth wireless will be more reality than promise during CTIA Wireless 2001.
Once again, the drive to third-generation, or 3G, wireless technology is expected to play prominently during the show, which runs through Thursday. However, the 3G push may be delayed as late as 2004 by the reversal of fortunes on Wall Street, which has made investors squeamish about the multi-hundred-billion-dollar prospect of buying new wireless spectrum and upgrading networks for high-speed connections.
But not everything hinges on 3G. New compression technologies such as those deployed by Sprint PCS and the introduction of 2.5G in the coming year offer at least a half step toward faster download speeds for mobile phones, laptops and personal digital assistants such as the hand-held Palm and Pocket PC computers.
Meanwhile, the smart-phone wars have begun heating up with the recent U.S. launch of three different handsets with built-in PDAs--from Kyocera, LG InfoComm and Ericsson--and a wireless phone attachment for Handspring’s Visor PDAs.
But Samsung and Sprint PCS plan to up the ante today by unveiling a prototype of the first smart phone with a full-color screen.
Not to be left out, Microsoft plans to use the show as a platform for discussing Stinger, the long-promised smart phone slated for introduction this year, and plans to introduce wireless phone attachments for the Pocket PC. Among other announcements, Microsoft is expected to introduce a fourth handset maker that will produce a smart phone based on the Stinger operating system.
Qualcomm may have gotten a lift Monday in part on news that Verizon Wireless, the largest U.S. mobile-phone company, agreed to buy $5 billion worth of gear from Lucent Technologies for new wireless services. The equipment uses Qualcomm chips and patents.
But analysts also are looking for Qualcomm’s Jacobs to repeat his forecast that demand for the company’s mobile-phone chips is outstripping supply, and that the company would ship more semiconductors than in the prior quarter.
“People want to own some Qualcomm ahead of that meeting,” said Mark McKechnie, an analyst at Banc of America Securities. “You can expect Irwin to say something positive.”
Among key wireless-related shares, Sprint PCS (PCS) rose $1.47 to $19.97 on Monday, Ericsson (ERICY) added 22 cents to $6.03, Verizon Wireless parent Verizon Communications (VZ) rose $1.55 to $48.88, Lucent (LU) surged $1.98 to $11.97, Nextel Communications (NXTL) gained $1.50 to $14.94, and Nokia (NOK) rose $1.99 to $26.70.
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Shares of wireless telecommunications-related companies have been among the biggest losers in the technology and telecom stock crash of the last year. The Barclays index of 19 wireless-related shares has fallen 60% from its peak.
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Barclays index of 19 wireless telecom stocks, monthly closes and latest
Monday: 276.84
Source: Bloomberg News
