A Look at Qualcomm’s (QCOM) Valuation Following Legal Win and Snapdragon 8 Elite Gen 5 Launch

QUALCOMM (QCOM) is making headlines this week following a decisive legal victory over Arm Ltd. in a much-watched license dispute, as well as the official launch of its Snapdragon 8 Elite Gen 5 platform. Investors are weighing how these moves might clarify QUALCOMM's innovation roadmap and competitive footing.

See our latest analysis for QUALCOMM.

QUALCOMM’s recent wave of news has energized investor sentiment, with confidence buoyed by legal clarity and clear signals of ongoing innovation. While the share price has steadily moved higher year-to-date, the bigger story is the 2.2% total shareholder return over the past year. This underscores that long-term holders continue to see meaningful gains as momentum builds around new product rollouts and strategic wins.

If the chip sector’s recent headlines have caught your attention, consider your next move by discovering See the full list for free..

With shares up nearly 10% year-to-date and analysts still assigning price targets above current levels, the question for investors is clear: is QUALCOMM trading at a discount today, or has the market already priced in another wave of growth?

Most Popular Narrative: 5% Undervalued

QUALCOMM’s narrative fair value stands at $177.71, a modest premium to the last close of $168.85. This suggests recent gains may still leave room for upside as the story unfolds. Analysts see the company’s strategic diversification and expansion as possible keys to future valuation trends. Here is a catalyst at the heart of their thinking:

Rapid growth in automotive and industrial IoT segments, supported by strong design win momentum and a robust multi-year pipeline (with a combined $22 billion revenue target by 2029), is set to diversify Qualcomm's revenue base and drive margin-accretive growth as these businesses become a larger share of total earnings.

Read the complete narrative.

Curious what’s driving this valuation? The narrative is powered by bullish forecasts for both automotive and IoT expansion, along with major changes in how profits could be valued a few years from now. Want to uncover which key assumptions fuel this price target and see the numbers behind QUALCOMM’s transformation? The answers may surprise you.

Result: Fair Value of $177.71 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, continued pressure from global rivals or renewed regulatory scrutiny could quickly challenge optimism around QUALCOMM’s growth story and future margin expansion.

Find out about the key risks to this QUALCOMM narrative.

Build Your Own QUALCOMM Narrative

If you have a different perspective or want to dig into the numbers yourself, it’s easy to piece together your own take in just a few minutes, Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding QUALCOMM.

Looking for More Fresh Investment Opportunities?

Don't let potential winners pass you by in this fast-moving market. Get ahead of the curve by targeting stocks with exceptional traits and growth paths using these proven strategies:

• Unlock new value by targeting strong cash flow performers with these 910 undervalued stocks based on cash flows. This is your chance to spot companies with compelling upside before others catch on.
• Boost your portfolio with consistent income streams and tap into these 19 dividend stocks with yields > 3% for stocks delivering reliable yields and robust fundamentals.
• Seize your edge in the future of finance by getting in early with these 78 cryptocurrency and blockchain stocks, where innovative firms are shaping tomorrow's blockchain and crypto landscape.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com