There were a number of big headlines in tech, particularly a significant settlement between tech giant Apple (NASDAQ: AAPL) and semiconductor company Qualcomm (NASDAQ: QCOM) . In addition, initial public offerings from cloud-based video-conferencing company Zoom (NASDAQ: ZM) and ideas platform Pinterest (NYSE: PINS) managed to grab the market's attention as their stock prices soared.
Here's a closer look at these stories.
Image source: Getty Images.
Apple and Qualcomm drop litigation
In perhaps the biggest news in tech this week, Apple and Qualcomm agreed to drop all litigation. The deal included a payment from Apple to Qualcomm estimated to be between $5 billion and $6 billion. In addition, the two companies reached a global six-year patent license agreement with a two-year option to extend as well as a multi-year arrangement for Qualcomm to supply chips to Apple.
The deal "reflects value and strength of Qualcomm's intellectual property," Qualcomm said in a press release about the deal.
Qualcomm shares surged 23% on Tuesday as investors digested the news.
Additional notable news during the week included the initial public offering of video-conferencing company Zoom . Shares surged on Thursday, when Zoom went public. With an IPO price set at $36 going into the offering, shares initially jumped 80% but closed the stock's first day of trading up 72% at $62.
Hype for the stock isn't surprising. Not only did the company's revenue more than double last fiscal year to $330.5 million, but Zoom is profitable. Cash from operations was $51.3 million in fiscal 2019, up from $19.4 million in fiscal 2018. Net income was $7.6 million in fiscal 2019, up from a loss of $3.8 million in fiscal 2018.
But with a $16.2 billion market capitalization, shares are unfortunately looking pricey now. Zoom trades at nearly 50 times sales.
Pinterest, a social network for finding and organizing ideas, also went public on Thursday. The stock ended its first trading day up 28% from its IPO price. This gave the company a market capitalization of nearly $13 billion.
Pinterest's revenue has been growing rapidly, rising from $473 million in 2017 to $756 million in 2018. The company, however, is still losing money. Though its loss narrowed from $130 million in 2017 to $63 million in 2018.
Pinterest said in its S-1 filing with the Securities and Exchange Commission that it has over 250 million users.
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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool owns shares of Qualcomm and has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy .