Bernstein struggles to see Qualcomm/Intel deal working out with acceptable risk

Bernstein notes that on Friday, the Wall Street Journal reported that Qualcomm (QCOM) had supposedly made a takeover approach to Intel (INTC) in recent weeks. The firm says that it “could of course construct a rationale,” but it “REALLY struggles with the fabs.” Intel is having enough trouble with them on its own, and Bernstein doesn’t know why Qualcomm would be a better owner for those assets. Overall, the firm says it is hard for it to see a deal working out financially with acceptable risk if the fabs are included. “We’ll be honest, we would prefer that Qualcomm not pursue this as it seems very risky to us given uncertain returns,” Bernstein says. The firm has an Outperform on Qualcomm and a Market Perform on Intel shares.