Evaluating Qualcomm (QCOM): Is Strong AI Expansion and Upbeat Analyst Revisions Signaling an Undervalued Opportunity?

QUALCOMM (QCOM) has been making headlines lately, and not just for its quarterly numbers. Investors have noticed a wave of upward analyst revisions to the company’s earnings estimates, paired with a steady stream of encouraging updates such as new AI-focused partnerships, strategic moves into industrial and automotive markets, and some executive reshuffling. All of this is happening as QUALCOMM’s core business faces the long-anticipated Apple modem handoff, so the timing of these expansion efforts appears more deliberate than ever.

This combination of fresh momentum and underlying challenges has triggered some intriguing stock price action over the past year. After delivering a single-digit gain year-to-date, QUALCOMM’s shares have bounced back in the past three months, showing renewed energy compared to a year-ago decline. Meanwhile, the company’s multi-year return still remains strong, supported by its reputation for consistent dividend growth even during sector ups and downs. The market appears to be weighing near-term risks against the company’s long-term diversification, especially as strategic partnerships suggest a shift beyond handsets.

With QUALCOMM building on positive earnings trends and pursuing new growth opportunities, the recent uptick raises the question of whether the stock is undervalued or if investors have already factored in the company’s next phase of expansion.

Most Popular Narrative: 46.4% Undervalued

According to the narrative by yiannisz, QUALCOMM shares are trading well below what the community believes is their true value. The narrative indicates that recent business momentum and future prospects may not be fully recognized in the current share price.

Qualcomm’s Edge AI leadership, including on-device AI partnerships with Meta, Microsoft, and Amazon, positions it as a leader in next-generation computing. At the same time, its Snapdragon Digital Chassis is driving significant automotive growth and strengthening its long-term outlook in AI, PCs, and connected vehicles.

Is Wall Street overlooking the next significant opportunity for QUALCOMM? Advanced AI hardware and ongoing expansion in automotive and IoT could provide momentum for a technology valuation shift that few are anticipating. What ambitious growth targets could be embedded in this price forecast? These details may influence how this stock's future potential is viewed.

Result: Fair Value of $300 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts. However, risks remain, such as slowing handset cycles or unexpected regulatory developments. Any of these factors could quickly shift sentiment around QUALCOMM’s aggressive expansion story. Find out about the key risks to this QUALCOMM narrative.

Another View: Discounted Cash Flow Perspective

Our DCF model offers a different lens on Qualcomm's valuation, estimating what the business is worth based on expected future cash flows. This method also sees the shares as undervalued at current levels. Could both views be right, or is something missing from the picture?

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

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out QUALCOMM for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own QUALCOMM Narrative

If you have a different perspective or want to dig into the numbers yourself, you can easily generate your own view 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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