/AI%20(artificial%20intelligence)/Close-%20up%20of%20computer%20chip%20with%20AI%20sign%20by%20YAKOBCHUK%20V%20via%20Shutterstock.jpg)
The artificial intelligence (AI) and semiconductor industries have grown rapidly over the past year, putting Qualcomm (QCOM) in a strong position within these evolving markets. The global AI market is expected to grow from $184 billion in 2024 to over $826 billion by 2030. This boom has fueled advancements in AI-powered technologies like Qualcomm’s Snapdragon platforms, which are now widely used in automotive, internet of things (IoT), and mobile applications.
Qualcomm’s fiscal 2024 results highlight its solid footing. The company reported a 19% year-over-year jump in Q4 revenue to $10.24 billion and a 40% increase in annual net income, reaching $2.92 billion for the quarter. Its automotive segment stood out with record growth of 68%, showing how well it has integrated AI and connectivity solutions into vehicles. On top of that, Qualcomm returned $7.81 billion to shareholders through dividends and buybacks in its fiscal 2024, showing its commitment to rewarding investors.
Wall Street has taken notice of Qualcomm’s strong performance and diversification efforts, with analysts predicting 25% upside from current levels. The company’s dividend yield, above the sector’s average and backed by healthy free cash flow, also makes it appealing for income-focused investors.
With its focus on automotive innovation, IoT growth, and mobile advancements, Qualcomm is well-positioned to ride the ongoing AI wave while continuing to deliver reliable dividends. But can it live up to analysts’ expectations of a 25% gain? Let’s dive deeper.
Qualcomm’s Financial Backbone
Qualcomm (QCOM) is a global leader in semiconductor and wireless technology, running a business model that combines designing chips and licensing its patents. This setup not only keeps it at the forefront of mobile technology, but also helps it expand into growing areas like 5G, IoT, and automotive solutions.
Over the past year, Qualcomm’s stock has had its ups and downs, trading between a low of $139.26 and a high of $230.63 — a swing of 65.6%. Even with this volatility, the stock has held up well, gaining 9.46% since early February 2024. So far in 2025, it’s kept that momentum going, climbing 11% in the year to date.
Investors seem optimistic about its future, with the stock rising 6.8% in just the last five trading days — a sign of growing confidence in its growth potential.
Qualcomm’s financial performance backs up this optimism, especially as Wall Street projects 25% upside for its stock in 2025. It wrapped up fiscal 2024 with $39 billion in revenue, a 9% increase from the previous year, and net income jumped by an impressive 40% to $10.1 billion. Its QCT segment saw a 9% boost, while QTL revenues grew by 5%. The automotive division was a standout performer, delivering record revenues for the fifth straight quarter. Meanwhile, its IoT segment had mixed results but showed signs of bouncing back later in the year.
From a valuation standpoint, Qualcomm looks appealing compared to its peers. Its forward P/E ratio of 14.74x is well below the sector average of 25.42x, hinting that it might be undervalued. With a trailing P/E of 19.10x and a PEG ratio of 2.75x, the stock strikes a good balance between growth potential and reasonable pricing.
Qualcomm’s Strategic Edge
Qualcomm is setting itself up for long-term growth, especially in areas like AI, IoT, and 5G. One example of its forward-thinking approach is its recent partnership with Aramco and Saudi Arabia’s RDIA to launch the Design in Saudi Arabia (DISA) program. This initiative is designed to help startups use AI and IoT for industrial applications by giving them access to Qualcomm’s advanced platforms and technical expertise. Moves like this not only boost Qualcomm’s global reach, but also position the company as a key player in fast-growing markets like industrial IoT and AI-driven tech. If the program succeeds, it could open up new revenue opportunities and help Qualcomm expand into untapped regions — a win for investors.
On top of that, Qualcomm’s dividend history adds to its appeal. The company recently announced a quarterly dividend of $0.85 per share, keeping its forward annual payout at $3.40 with a yield of 2.03%. With a payout ratio of just 27.68%, Qualcomm has plenty of room to keep rewarding shareholders while still investing in growth. Its 21-year streak of increasing dividends shows its financial stability, and its yield is well above the tech sector average of 1.37%.
These factors highlight Qualcomm’s strengths: a focus on innovation that drives future growth and a commitment to steady returns for investors. This balance makes it not just an AI leader, but also a reliable dividend stock with big potential for 2025.
Wall Street’s Verdict
Looking ahead, Qualcomm has set some ambitious five-year goals for its QCT business, showing its plans for long-term growth. By fiscal 2029, the company expects its automotive and IoT segments to bring in a combined $22 billion in revenue, with $8 billion coming from automotive alone. IoT is projected to contribute $14 billion, while other areas like PCs and industrial applications are expected to add another $8 billion together. These targets highlight Qualcomm’s efforts to grow beyond mobile handsets, using its strengths in 5G, AI, and low-power computing to expand into fast-growing markets.
Wall Street shares this optimism. Out of 32 analysts covering the stock, 16 rate it a “Strong Buy,” one calls it a “Moderate Buy,” and 14 suggest holding it. Overall, this gives Qualcomm a “Moderate Buy” rating. The average price target is $203.35, which suggests 25% upside from its current price as of Jan. 21, 2025.
Tigress Financial has the highest target at $270, while JPMorgan recently raised its target to $200, citing the company’s push into AI-enabled PCs and automotive solutions. Institutional investors are also confident, with institutional ownership at a robust 74.35%. Major stakeholders include big names like Vanguard Group, BlackRock, and State Street holding significant stakes. This positive outlook reflects strong belief in Qualcomm’s ability to grow in new markets while staying strong in its core semiconductor and wireless businesses.
Conclusion
Qualcomm strikes a rare balance between innovation and stability, making it a standout in both growth and income portfolios. With its strong financials, ambitious growth targets in AI-driven markets, and a history of rewarding shareholders through consistent dividends, the company is well-positioned for the future. In addition to Wall Street’s confidence and 25% upside potential, Qualcomm looks like a solid contender for investors seeking both long-term gains and steady returns.
