What happened

Qualcomm (QCOM 3.20%) stock was dinged early Monday on the back of a recommendation downgrade from a prominent bank. But you can't keep a much-liked tech company down for long, and Qualcomm bulls soon rallied to push the share price almost 2% higher on the day.

So what

Before the market open, Wells Fargo prognosticator Gary Mobley changed his recommendation on Qualcomm to underweight (read: sell) from his previous equal weight (neutral). He left his $105 per share price target intact, however.

Much of Mobley's new outlook is due to his bearish view of the chip sector in general. He wrote that until "investors are convinced we've reached a trough in the chip cycle, we believe shares of companies w/high smartphone exposure should underperform the broader chip sector."

He is also concerned with Qualcomm's heavy reliance on the smartphone market. Although the company is dominant in that sphere, Mobley described it as currently in a "no-growth" environment.

At the moment, Qualcomm enjoys a strong position as a critical supplier for Apple (AAPL 1.97%) devices. Beyond that, perhaps its best potential lies in the high-end Android phone segment. However, Mobley feels this "may not be the best exposure to have."

Now what

Tech stocks aren't exactly staging a full recovery from the many bear attacks they suffered throughout 2022, but investors are conscious of their weakened prices and are sniffing around for bargains. Meanwhile, demand for Apple's recently introduced iPhone 16 appears to be robust, so at least in the short to medium term, Qualcomm should continue to benefit from the association with its most important partner.