/Qualcomm%2C%20Inc_%20logo%20on%20phone-by%20viewimage%20via%20Shutterstock.jpg)
Based in San Diego, California, QUALCOMM Incorporated (QCOM) is involved in the development and commercialization of foundational technologies, including semiconductors, software, and services for the wireless industry. Valued at $184.1 billion by a market cap, the company also owns patents critical to the 5G and 4G mobile communications standards.
Shares of this semiconductor giant have significantly outperformed the broader market over the past 52 weeks. QCOM has gained 40.4% over this time frame, while the broader S&P 500 Index ($SPX) has risen 18.2%. In 2024, shares of QCOM are up 13.2%, compared to SPX’s 11.5% gain on a YTD basis.
Zooming in further, QCOM’s outperformance becomes more evident when compared to the Nasdaq Semiconductor ETF’s (FTXL) 22.3% gain over the past 52 weeks and 5.6% return on a YTD basis.
The outperformance of QUALCOMM is driven by the strategy of shifting its business mix beyond smartphones and increasing progress toward more profitable sectors, including automotive and Internet of Things (IoT) solutions, coupled with continuous investment in Research and Development.
The stock surged over 8% on July 31, riding high on a broader chip rally and strong Q3 earnings anticipation. Yet, it took a nosedive of 9.4% the following day, post-Q3-announcement, despite crushing Wall Street’s estimates and offering optimistic fiscal 2024 guidance. The drop came as investors fretted over a sluggish smartphone market recovery and revenue impact from the U.S. revoking Qualcomm's export license for Huawei.
For the current fiscal year, ending in September, analysts expect QCOM's EPS to grow 20.4% year over year to $7.98.The company's earnings surprise history is promising. It beat the consensus estimates in each of the last four quarters.
Among the 30 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 17 “Strong Buy” ratings, one “Moderate Buy,” 11 “Holds,” and one “Strong Sell.”
The configuration has remained fairly steady over the past months.
On Jul. 21, Tigress Financial’s analyst Ivan Feinseth maintained a "Buy" rating and raised the price target on QCOM to $270 – the street high price target, expecting QCOM to benefit from advancements in AI capabilities, alongside its leadership in communication technology and ongoing innovations. This implies an impressive potential upside of 63.7% from the current price levels.
The mean price target of $213.18 represents a premium of 29.2% to QCOM's current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
