After settling a lawsuit with iPhone maker Apple, U.S. chipmaker Qualcomm has added about 26 billion U.S. dollars to its market value over the course of two days.
Shares of Qualcomm on Wednesday jumped 12.25 percent following a 23.21-percent surge in the previous session, fueled by the news that the company and Apple have settled a lawsuit regarding royalty disputes. Apple stock also closed 1.95 percent higher.
The settlement, announced on Tuesday, includes an unspecified payment from Apple to Qualcomm.
The two companies also have reached a six-year license agreement, effective as of April 1, 2019, including a two-year option to extend, and a multiyear chipset supply agreement.
Qualcomm's rival Intel had announced its plan to exit the 5G smartphone modem business following Qualcomm's settlement with Apple.
Wall Street analysts believed the Qualcomm-Apple settlement would help Qualcomm strengthen its position in 5G network and expand revenue accordingly.
A number of brokerages upgraded their ratings of Qualcomm stock and raised their price targets.
JPMorgan analyst Samik Chatterjee upgraded Qualcomm to "overweight" from "neutral" with a price target of 88 dollars as 5G technology leadership will be appealing to investors, especially in the absence of litigation overhang.
Stifel's Kevin Cassidy set a 100-dollar price target based on his confidence in Qualcomm as the "clear leader" in 5G modem technology.
Over the past two years, the two companies have sued one another in courts, each asking for billions in damages.
According to media reports, Apple previously accused Qualcomm of engaging in illegal patent licensing practices, and was seeking up to 27 billion dollars in damages.
Qualcomm, for its part, argued Apple and its business partners had stopped paying royalties and was seeking up to 15 billion dollars in damages.