How the China Antitrust Probe Impacts Qualcomm’s Current Valuation

Wondering what to do with QUALCOMM stock right now? You are not alone. With the share price recently closing at $153.59, QUALCOMM has grabbed attention amid both choppy trading and big-picture industry shifts. Over the past week, shares have dipped by 9.2%, and the 30-day return sits at -4.9%. Longer term, QUALCOMM is just about flat for the year to date, but up 49.7% over three years and 32.5% over five years, so there is no shortage of context to consider.

Recent headlines have stirred up both questions and opportunities. Perhaps most notably, Chinese regulators have launched an antitrust probe into QUALCOMM’s Autotalks deal, adding uncertainty and, for now, a bit of a risk premium to the shares. At the same time, Qualcomm’s adoption of the latest Arm technology could boost its AI edge, positioning the company against top players like MediaTek and Apple. With these factors swirling, investors are actively reassessing risk and growth potential, weighing regulatory challenges against innovation-driven upside.

For those looking beyond the noise, QUALCOMM actually stands out when it comes to valuation. The company is considered undervalued in 5 out of 6 key checks, giving it a solid value score of 5. As always, the real question is not just whether a stock looks cheap, but whether those numbers truly capture what lies ahead for QUALCOMM. Let us break down the major valuation approaches next, before unpacking an even better way to think about value at the end of the article.

Why QUALCOMM is lagging behind its peers

Approach 1: QUALCOMM Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates what a business is worth today by projecting its future cash flows and then discounting them back to the present. For QUALCOMM, this process starts with its latest Free Cash Flow, which stands at $11.2 Billion. Analyst forecasts cover up to 2029, with Free Cash Flow expected to rise to $16.3 Billion in that year. Beyond five years, experts extrapolate those numbers, indicating continued growth, with projections reaching $21.1 Billion by 2035.

The DCF analysis applies reasonable assumptions to these forward-looking figures and provides an estimate of the company’s intrinsic value based on actual and projected performance. Using this approach, QUALCOMM's fair value per share is calculated at $193.38. With shares recently closing at $153.59, this model suggests the stock is trading at a 20.6% discount to its intrinsic value.

Given these figures, QUALCOMM appears significantly undervalued based on its expected cash flows, which may interest investors willing to look past near-term volatility.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for QUALCOMM.

Our Discounted Cash Flow (DCF) analysis suggests QUALCOMM is undervalued by 20.6%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: QUALCOMM Price vs Earnings (PE Ratio)

The Price-to-Earnings (PE) ratio is one of the most widely used metrics for valuing profitable companies like QUALCOMM because it indicates how much investors are willing to pay for each dollar of earnings. For established businesses with steady profits, the PE ratio offers a quick snapshot of market sentiment and can help investors compare valuations across companies and industries.

However, the "right" PE ratio for a stock depends on a few core factors. Companies with higher growth expectations or lower risk profiles typically command a higher PE; those facing more uncertainty tend to trade at a discount. QUALCOMM’s current PE ratio stands at 14.2x, which is notably below both the semiconductor industry average of 35.3x and the peer group average of 59.8x. These benchmarks provide context, but they can be skewed by varying business models, growth rates, and risk profiles.

This is where Simply Wall St’s “Fair Ratio” comes in. The Fair Ratio, calculated for QUALCOMM at 27.0x, is designed to reflect what multiple the market should reasonably pay, considering the company’s earnings growth, margins, industry trends, size, and risk factors. Unlike raw industry and peer averages, the Fair Ratio is tailored to QUALCOMM’s specific situation and offers a more accurate view of intrinsic value. When we compare QUALCOMM’s current PE of 14.2x to its Fair Ratio of 27.0x, the stock appears undervalued based on this analysis.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your QUALCOMM Narrative

Earlier, we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your personalized investment story for a company. It is how you connect your expectations about QUALCOMM's future, such as revenues, earnings, and margins, with the numbers you consider fair, all grounded by your analysis of the company's real-world business outlook.

Unlike traditional models, Narratives work by linking the story you believe in to a financial forecast and ultimately to a fair value. This makes your investment logic transparent and easy to update as news breaks or earnings roll in. Narratives are available for anyone to use on the Simply Wall St platform via the Community page, where millions of investors share and discover perspectives.

With Narratives, you can quickly see how your Fair Value compares to QUALCOMM’s current share price, helping inform practical buy or sell decisions based on what you think will really drive results. As new information comes to light, Narratives update automatically, so your view is always current.

For example, some investors see QUALCOMM's fair value at $300, betting on strong AI and automotive growth, while others are more cautious, estimating a fair value closer to $140 due to competitive and regulatory risks. This highlights how Narratives allow every investor to act on their unique outlook.

Do you think there's more to the story for QUALCOMM? Create your own Narrative to let the Community know!

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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