Qualcomm
QCOM
$173.50
+1.87%
Qualcomm develops and licenses wireless technology and designs chips for smartphones, with its key patents forming the backbone of 3G, 4G, and 5G networks. As the world's largest wireless chip vendor, it supplies leading-edge processors to nearly every premier handset maker and also sells RF-front end modules, automotive, and IoT chips. The current investor narrative centers on Qualcomm's strategic pivot to AI data center and edge computing, highlighted by massive deals with three hyperscalers and a doubled long-term revenue target, which could decouple the stock from mobile cyclicality and drive a re-rating.…
QCOM
Qualcomm
$173.50
Related headlines
QCOM 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Qualcomm's 12-month outlook, with a consensus price target around $222.73 and implied upside of +28.4% versus the current price.
Average Target
$222.73
0 analysts
Implied Upside
+28.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$100 - $314
Analyst target range
Qualcomm is covered by 30 analysts, with a consensus recommendation of 'hold' (mean rating 2.56 on a 1-5 scale where 1 is strong buy). The average target price is $222.73, implying approximately +29.7% upside from the current price of $171.78. The distribution shows a mix of buy, hold, and sell ratings, with recent actions from firms like TD Cowen (Buy) and Rosenblatt (Buy) contrasting with Barclays (Underweight) and Morgan Stanley (Equal Weight). The target range spans from a low of $100 to a high of $314, indicating significant uncertainty. The high target of $314 assumes successful AI data center expansion and multiple expansion, while the low target of $100 prices in a sharp downturn in the handset market and failure of the AI pivot. The wide spread (214%) reflects high conviction divergence among analysts, with the recent upgrade from Morgan Stanley (from Underweight to Equal Weight) suggesting some positive sentiment shift, but the overall hold consensus implies caution.
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Bulls vs Bears: QCOM Investment Factors
Qualcomm presents a high-conviction binary outcome: the AI data center pivot could unlock massive growth and justify a re-rating, but the core handset business is stagnating and margins are compressing. The bull case rests on the $15B data center revenue target and a forward P/E discount to peers, while the bear case highlights revenue stagnation, margin erosion, and a trailing P/E premium. The single most important tension is whether the AI pivot will materialize into meaningful revenue and earnings growth, as the current valuation implies a sharp earnings recovery that has yet to be proven.
Bullish
- AI Pivot to Data Centers: Qualcomm signed massive deals with three hyperscalers and doubled its long-term data center revenue target to $15B by 2029, potentially decoupling from mobile cyclicality and driving a re-rating.
- Attractive Forward Valuation: Forward P/E of 15.54x is a 29% discount to the semiconductor industry average of ~22x, implying the market expects significant earnings growth from the AI pivot.
- Strong Free Cash Flow: TTM free cash flow of $12.5B provides ample liquidity for reinvestment, dividends, and buybacks, supporting shareholder returns.
- Analyst Target Upside: Average analyst target of $222.73 implies ~29.7% upside from the current price of $171.78, with a high target of $314 suggesting substantial potential if AI initiatives succeed.
Bearish
- Revenue Growth Stagnation: Revenue in Q2 fiscal 2026 was $10.6B, down 3.46% YoY, and has fluctuated between $9.4B and $12.3B over the past eight quarters, indicating a lack of consistent growth.
- Margin Compression: Operating margin fell to 21.79% in Q2 2026 from 28.42% a year ago, while gross margin slipped to 53.77% from 55.03%, signaling rising costs or competitive pressure.
- High Trailing P/E Premium: Trailing P/E of 32.67x is a 49% premium to the industry average of 22x and above the stock's historical range, suggesting the stock is expensive on current earnings.
- Bearish Short-Term Momentum: The stock has declined 19.34% in the past month and underperformed the S&P 500 by 19.65%, with a beta of 1.638 amplifying downside risk.
QCOM Technical Analysis
Qualcomm is in a volatile uptrend over the past year, with a 1-year price change of +12.56%, but the stock has pulled back sharply from its 52-week high of $259.92. Currently trading at $171.78, it sits at 66% of its 52-week range, indicating a significant correction from the highs and a potential value zone if the long-term trend holds. The stock's beta of 1.638 confirms it is 64% more volatile than the S&P 500, amplifying both upside and downside moves. Short-term momentum is decisively bearish, with a 1-month price change of -19.34% and a 3-month change of +26.12%, showing a sharp reversal from the strong rally in May. The 1-month decline conflicts with the 1-year uptrend, suggesting a corrective pullback or potential trend change; the relative strength vs. SPY is -19.65% over 1 month, indicating significant underperformance. The 52-week low of $121.99 provides key support, while the 52-week high of $259.92 is resistance. A break below $121.99 would signal a breakdown and potential further downside, while a move above $259.92 would confirm a resumption of the uptrend. With a beta of 1.638, the stock's volatility is elevated, requiring careful position sizing.
Beta
1.64
1.64x market volatility
Max Drawdown
-33.9%
Largest decline past year
52-Week Range
$122-$260
Price range past year
Annual Return
+9.1%
Cumulative gain past year
| Period | QCOM Return | S&P 500 |
|---|---|---|
| 1m | -23.3% | +0.2% |
| 3m | +27.5% | +5.2% |
| 6m | +9.9% | +8.6% |
| 1y | +9.1% | +19.0% |
| ytd | +0.3% | +9.7% |
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QCOM Fundamental Analysis
Revenue in the most recent quarter (Q2 fiscal 2026, ended March 29, 2026) was $10.599 billion, down 3.46% year-over-year from $10.979 billion in the prior-year quarter, marking a deceleration after the prior quarter's $12.252 billion. The QCT segment contributed $9.076 billion and QTL $1.382 billion, with the core handset business facing headwinds, though AI data center deals offer a new growth vector. The multi-quarter trend shows revenue fluctuating between $9.393 billion and $12.252 billion over the past eight quarters, indicating stagnation rather than consistent growth. Net income in Q2 was $7.371 billion, a significant jump from $2.812 billion a year ago, but this was boosted by a $5.138 billion income tax benefit; excluding that, normalized net income was roughly $2.233 billion. Gross margin was 53.77%, slightly down from 55.03% a year ago, while operating margin was 21.79%, down from 28.42% in the prior-year quarter, indicating margin compression. The company remains profitable with a net margin of 12.51% on a trailing twelve-month basis, but the operating margin trend is declining. Free cash flow (TTM) is $12.502 billion, providing ample liquidity. The debt-to-equity ratio is 0.77, moderate for a semiconductor company, and the current ratio of 2.82 indicates strong short-term solvency. ROE is 26.13%, reflecting efficient use of equity, though the high payout ratio of 68.67% suggests limited retained earnings for reinvestment.
Quarterly Revenue
$10.6B
2026-03
Revenue YoY Growth
-3.5%
YoY Comparison
Gross Margin
53.8%
Latest Quarter
Free Cash Flow
$12.5B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is QCOM Overvalued?
Since net income is positive, the primary valuation metric is the P/E ratio. The trailing P/E is 32.67x, while the forward P/E is 15.54x, implying the market expects significant earnings growth in the coming year. The gap between trailing and forward P/E suggests that the market is pricing in a sharp earnings recovery, likely driven by AI-related revenue. Compared to the semiconductor industry average P/E of roughly 22x, Qualcomm's trailing P/E of 32.67x represents a 49% premium, but the forward P/E of 15.54x is at a 29% discount to the industry average, indicating that the market expects earnings growth to outpace the sector. Historically, Qualcomm's trailing P/E has ranged from 4.59x (Q2 2026) to 26.29x (Q3 2024), with the current 32.67x above the historical range, suggesting the stock is expensive on trailing earnings. However, the forward P/E is near the lower end of its historical forward range, implying that if earnings materialize, the valuation could be attractive.
PE
32.7x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 10x~21x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Qualcomm's core handset business faces revenue stagnation, with Q2 2026 revenue down 3.46% YoY and operating margin compressing from 28.42% to 21.79% over the past year. The company's net income in Q2 was boosted by a $5.14B tax benefit, masking underlying normalized net income of ~$2.23B, which would represent a significant decline from the prior year's $2.81B. The debt-to-equity ratio of 0.77 is moderate, but the high payout ratio of 68.67% limits retained earnings for reinvestment, which could be a concern if the AI pivot requires heavy capital expenditure.
Market & Competitive Risks: The stock's trailing P/E of 32.67x is at a 49% premium to the semiconductor industry average, making it vulnerable to multiple compression if growth disappoints. With a beta of 1.638, Qualcomm is highly correlated to market movements, and the recent 19.34% monthly decline reflects macro sensitivity. Competitive risks include Nvidia and AMD in data center AI chips, as well as Apple's ongoing efforts to develop in-house modems, which could erode Qualcomm's licensing revenue. Recent news highlights a Nasdaq selloff and rotation out of AI leadership, which could further pressure the stock.
Worst-Case Scenario: If the AI pivot fails to deliver and the handset market weakens, Qualcomm could see its valuation compress to historical lows. The 52-week low of $121.99 represents a 29% downside from the current price of $171.78, and the analyst low target of $100 implies a 42% decline. In a severe downturn, the stock could retest the $100 level, resulting in a loss of approximately 42% for investors buying at current levels.
