A Look at Qualcomm's Valuation Following Major AI Expansion and Saudi AI Systems Deal

QUALCOMM (QCOM) has announced a major move into AI infrastructure with the unveiling of its AI200 and AI250 chips. A high-profile collaboration with HUMAIN will bring 200 megawatts of Qualcomm AI systems to Saudi Arabia starting in 2026.

See our latest analysis for QUALCOMM.

QUALCOMM's push into large-scale AI infrastructure has sparked strong momentum in its shares, with a 1-day share price return of 2% and a 22% gain over the past 90 days. The enthusiasm has carried into the bigger picture, as the company boasts a robust 12% total shareholder return over the last year and an impressive 82% for the past three years. This trend signals that investor confidence in QUALCOMM's long-term growth is building as its AI ambitions take center stage.

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With QUALCOMM stock near record highs and optimism swirling around its AI-driven expansion, the key question for investors now is whether Wall Street has already accounted for this growth or if an attractive entry point still exists.

Most Popular Narrative: 0.7% Overvalued

QUALCOMM closed at $180.90, which is just above the most closely followed narrative's fair value estimate of $179.67. This razor-thin gap puts extra focus on the evidence and assumptions driving that projection.

Bullish analysts highlight growing demand for Qualcomm's AI accelerators and rack-scale solutions, which are now being deployed in large-scale projects set to generate significant revenue. Momentum in emerging markets, such as advanced driver-assistance systems, robotics, and industrial automation, is viewed as a catalyst for Qualcomm's long-term growth prospects, especially from fiscal year 2027 onward.

Read the complete narrative.

Want to know what market trends fuel this razor-close valuation call? The foundation of the narrative is surprisingly ambitious growth in next-generation technologies, paired with earnings assumptions that could shake up Wall Street expectations. The price target hides a unique blend of optimism and caution. Which daring forecast tips the scales? Read on for all the numbers and logic behind this fair value calculation.

Result: Fair Value of $179.67 (OVERVALUED)

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

However, rising competition from industry giants and unpredictable geopolitical tensions could quickly challenge QUALCOMM's growth story and change sentiment on future earnings.

Find out about the key risks to this QUALCOMM narrative.

Another View: What Does the SWS DCF Model Indicate?

Switching perspectives, the Simply Wall St DCF model points to a fair value estimate of $213.79 for QUALCOMM, which is well above current trading levels. This suggests shares may actually be undervalued by about 15% if you trust this cash flow outlook. Could market caution be masking real opportunity, or is the DCF model overlooking risks the market sees?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own QUALCOMM Narrative

If the current narrative does not reflect your view or you want to dig into the data yourself, you can shape your own perspective 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.

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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.

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