The Bull Case For QUALCOMM (QCOM) Could Change Following Strong Q3 Results and Share Buyback

• Earlier this month, QUALCOMM reported third quarter results showing revenue of US$10.37 billion and net income of US$2.67 billion, both up compared to the previous year, and highlighted significant progress in its automotive and IoT businesses.
• In addition, QUALCOMM completed a major buyback of 34.69 million shares since November 2024 and emphasized ongoing expansion in AI and data center markets, despite challenges related to Apple reducing its reliance on QUALCOMM’s chips.
• We’ll examine how QUALCOMM’s continued growth in automotive and IoT segments impacts the longer-term investment outlook for the company.

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QUALCOMM Investment Narrative Recap

Owning QUALCOMM stock requires confidence in its transition from a mobile chip leader to a key supplier for automotive, IoT, and next-generation AI products. The latest quarterly results reinforced strong progress in these diversification efforts, while the short-term catalyst remains execution in the automotive and IoT segments. Near-term, the most significant risk continues to be the reduction in Apple-sourced revenues as the company shifts to in-house chips, but the recent results have not changed this risk profile in a material way.

QUALCOMM's completion of its US$5.3 billion buyback, representing over 3% of outstanding shares since late 2024, stands out as particularly relevant. This move underscores management's commitment to shareholder returns even as the company invests heavily in new growth areas like automotive and AI, both of which remain central to the near-term investment case as catalysts.

However, investors should be aware that even as diversification accelerates, dependency on major OEMs could still pose future headwinds...

Read the full narrative on QUALCOMM (it's free!)

QUALCOMM's narrative projects $46.9 billion in revenue and $12.2 billion in earnings by 2028. This requires 2.7% yearly revenue growth and a $0.6 billion increase in earnings from the current $11.6 billion.

Uncover how QUALCOMM's forecasts yield a $175.46 fair value, a 19% upside to its current price.

Exploring Other Perspectives

Fair value estimates from 35 Simply Wall St Community members range widely from US$140 to US$300 per share. While many see opportunity in diversification into automotive and IoT, others are focused on competitive risks that could impact QUALCOMM’s momentum and long-term returns, explore these differing views for a fuller picture.

Explore 35 other fair value estimates on QUALCOMM - why the stock might be worth over 2x more than the current price!

Build Your Own QUALCOMM Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your QUALCOMM research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free QUALCOMM research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate QUALCOMM's overall financial health at a glance.

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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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