Shares of Qualcomm spiked more than 12% Wednesday morning on the heels of two big wins. The rally added about $11 billion to its market cap following a massive jump on Tuesday, which would bringing it to about $96 billion.
On Tuesday, Qualcomm and Apple announced they had settled their royalty dispute just as trial proceedings had begun in San Diego. The deal, which included a payment from Apple and chipset supply agreement, sent the stock soaring 23% and added about $16 billion to its market cap.
The dispute had centered around Apple’s use of Qualcomm’s modem chips. Apple argued that Qualcomm’s prices and mandate that companies using its chips also pay licensing fees for its patents was an abuse of its position as a dominant supplier. Qualcomm argued that Apple had withheld payments that were part of its royalty agreement.
The settlement likely saved both companies from an extensive legal battle where each side sought billions in damages. After news of the deal broke, Qualcomm said it expects incremental earnings per share of $2 as product shipments ramp.
Just hours later, Intel said it would be dropping out of the 5G smartphone market, effectively knocking out a competitor for Qualcomm in the race to build technology for the next generation network. Intel said it would continue to invest in the 5G network infrastructure business, but had found that in the smartphone market, “there is no clear path to profitability and positive returns,” Intel CEO Robert Swan said in a statement.
Tuesday marked Qualcomm’s best day since May 2002, when the stock spiked more than 18%. During premarket trading on Wednesday, Apple’s stock was slightly positive and Intel was up more than 4%.