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San Diego, California-based QUALCOMM Incorporated (QCOM) operates as a multinational semiconductor and telecommunications equipment company. With a market cap of $173.8 billion, the company develops and delivers digital wireless communications products and services based on CDMA digital technology.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and QCOM perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the semiconductors industry. QCOM is a standout player in wireless technology, known for its pivotal role in developing essential patents for 3G, 4G, and 5G networks. With its strong intellectual property portfolio, QCOM has a competitive edge in the market. The company's Snapdragon processors are highly regarded for their performance and are widely used in top-tier smartphones, solidifying its position as a leading supplier of advanced processors.
Despite its notable strength, QCOM slipped 31.9% from its 52-week high of $230.63, achieved on Jun. 18, 2024. Over the past three months, QCOM stock gained marginally, outperforming the Technology Select Sector SPDR Fund’s (XLK) 2.6% losses during the same time frame.
In the longer term, shares of QCOM climbed 2.3% on a YTD basis, outperforming XLK’s 3% dip over the same time frame. However, QCOM rose marginally over the past 52 weeks, underperforming XLK’s 10.2% returns over the last year.
To confirm the bearish trend, QCOM has been trading below its 50-day moving average since late February. It is trading below its 200-day moving average since August 2024, with some fluctuations.
QCOM is facing challenges as Apple Inc. (AAPL) shifts away from using its patents, developing its own baseband chips. Additionally, pricing pressures and supply chain constraints have affected its performance.
On Feb. 5, QCOM shares closed up more than 1% after reporting its Q1 results. Its adjusted EPS of $3.41 beat Wall Street expectations of $2.93. The company’s adjusted revenue was $11.7 billion, topping Wall Street forecasts of $10.9 billion. For Q2, QCOM expects its adjusted EPS to range from $2.70 to $2.90, and expects adjusted revenue to be between $10.2 billion and $11 billion.
In the competitive arena of semiconductors, Broadcom Inc. (AVGO) has taken the lead over QCOM, showing resilience with a 54.7% uptick over the past 52 weeks. However, AVGO has lagged behind the stock with a 14% loss on a YTD basis.
Wall Street analysts are moderately bullish on QCOM’s prospects. The stock has a consensus “Moderate Buy” rating from the 32 analysts covering it, and the mean price target of $201.44 suggests an potential upside of 28.2% from current price levels.
