Is Qualcomm Stock a Buy Even Without Huawei Deal?

Chip designer Qualcomm (QCOM) recently delivered stronger-than-expected first-quarter financials for its fiscal 2025. The semiconductor company delivered revenue of $11.67 billion, up about 18% year-over-year. Moreover, it surpassed the Street’s forecast of $10.94 billion. The company’s adjusted earnings of $3.41 per share jumped about 24% year-over-year and came ahead of analysts’ estimate of $2.17.

Despite these strong Q1 figures and optimistic Q2 projections, Qualcomm’s stock came under pressure. The company anticipates its licensing business may remain flat or experience a slight increase in the low single digits year-over-year. This cautious outlook is primarily attributed to the expiration of Qualcomm’s agreement with Huawei Technologies.

Qualcomm has taken steps by extending, renewing, or establishing new license agreements with several key original equipment manufacturers (OEMs), including two major Chinese OEMs. Negotiations are also ongoing with Huawei, although a resolution has yet to be reached. This uncertainty surrounding Huawei will impact Qualcomm’s financial performance heading into the new calendar year.

Despite these challenges, Qualcomm remains poised for growth, supported by several catalysts that could drive financial results and shareholder value. Let’s dig deeper.

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Factors Supporting Qualcomm’s Growth

Qualcomm (QCOM) stands at the forefront of transformative technological advancements. While the company is still negotiating with Huawei, its robust chipset business is well-positioned for sustained growth, fueled by strong demand in the handset and automotive sectors.

Qualcomm’s Snapdragon platform has demonstrated exceptional traction in premium-tier handsets, further solidifying the company’s leadership in mobile technology. As 5G adoption continues to expand, Qualcomm’s ability to deliver superior performance and power efficiency positions it as a key player in the smartphone market.

The company’s focus on automotive and Internet of Things (IoT) markets is yielding impressive results, with year-over-year revenue growth of 61% and 36%, respectively, in Q1. These segments are critical to Qualcomm’s diversification strategy, as evidenced by management's goal of achieving $22 billion in non-handset revenues by 2029.

The automotive sector is another significant growth area for Qualcomm as automakers increasingly adopt advanced driver assistance systems (ADAS), AI-powered in-cabin experiences, and connected car technologies. Qualcomm’s Snapdragon Cockpit Elite platform and collaborations with industry leaders reflect its competitive edge and position it well to deliver solid growth.

AI innovation is another key pillar of Qualcomm’s growth strategy. The company is well-positioned to benefit from the shift toward on-device AI processing, which offers enhanced customization and accessibility. As AI training remains cloud-centric and inference increasingly moves to the device level, Qualcomm’s industry-leading AI processors for the edge will likely drive widespread adoption across various applications, fueling demand for its platforms.

Qualcomm’s Snapdragon X Series platforms are gaining traction in the PC market. This momentum highlights Qualcomm’s growing influence in the computing space.

Extended reality (XR) remains a promising growth space for Qualcomm. The company’s collaborations with Meta Platforms (META) and other key partners have positioned it as the preferred solutions provider for virtual, mixed, and augmented reality technologies. Qualcomm is well-positioned to capture significant market share in this emerging category as smart glasses become more integrated with AI features.

Qualcomm’s industrial IoT portfolio is also expanding, with strong adoption across energy, manufacturing, logistics, and retail sectors. The introduction of the AI Inference Suite and its partnerships with industry leaders position it well to deliver steady growth in the coming years.

The Bottom Line on Qualcomm Stock 

While the absence of revenues from Huawei Technologies will impact Qualcomm’s financials in the short term, its solid competitive positioning in AI, automotive, IoT, and XR, coupled with its robust licensing business, makes it well-positioned for sustained growth.

Wall Street analysts maintain a “Moderate Buy” consensus rating on QCOM stock.

However, as technological advancements accelerate and industry demands evolve, Qualcomm’s differentiated product portfolio and strategic partnerships will drive solid growth and enable it to enhance its shareholder value.

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