The Ultimate Investment Strategy: Qualcomm Should Acquire MRVL and CRDO Instead of Intel
In a recent report, Mizuho analysts have advised Qualcomm (NASDAQ:) to steer clear of pursuing a deal with Intel (NASDAQ:) and instead focus on acquiring alternative chip companies for better strategic fit and minimal regulatory hurdles.
The Wall Street Journal had reported last week that Qualcomm had approached Intel for a potential takeover, but Mizuho believes that such a deal would face significant resistance from Chinese and international regulators due to geopolitical factors.
Mizuho suggests two alternative targets for Qualcomm - MRVL and CRDO. MRVL, with a market cap in the low $60 billion range, is seen as a more strategic fit for Qualcomm, offering higher gross margins and better assets for AI and data center. On the other hand, CRDO, with a market cap of around $5 billion, provides promising technology in high-growth areas like data center interconnect and optical components.
While a deal with CRDO may not have a significant financial impact on Qualcomm, Mizuho believes it presents a more feasible and strategically sound option compared to the complexities surrounding Intel. They advise Qualcomm to consider these alternatives as they align better with the company's strategic goals and pose fewer regulatory challenges.
In conclusion, by focusing on acquiring MRVL and CRDO instead of pursuing a deal with Intel, Qualcomm can enhance its strategic position, improve its technology assets, and navigate regulatory hurdles more effectively in the current market landscape. This investment strategy could potentially lead to long-term growth and success for Qualcomm in the competitive chip industry.