Qualcomm: Heading Back Up

Core Viewpoint - Qualcomm's investment story remains strong despite recent stock pullback, driven by future growth in Automotive and AI PCs rather than current results [1][6] Financial Performance - For FQ3'24, Qualcomm reported a Non-GAAP EPS of $2.33, beating estimates by $0.07, and revenue of $9.39 billion, reflecting an 11.3% year-over-year increase [2] - Handset sales grew by 12%, while Automotive sales surged by 87% to reach $811 million [2] Market Opportunities - The IoT segment is poised for significant growth with the launch of AI PCs, which began in June [2] - Qualcomm's Copilot+ PCs powered by Snapdragon X series have been launched at 47 retailers across 20 devices, indicating strong market entry [2] - Qualcomm captured 20% of the PC market during the launch week, primarily due to long battery life [2] Future Projections - Qualcomm is guiding for FQ4 revenues potentially exceeding $10 billion, with expectations of substantial growth in Automotive and AI PC segments [2] - The company forecasts nearly $9 billion in combined business from Automotive and AI PCs, with an Automotive order book projected at $30 billion [2] - Automotive sales are expected to reach $2.8 billion in FY24, with projections of $4 billion in 2026 and $5 billion in 2027 [2] Valuation and Analyst Sentiment - Qualcomm's stock is currently trading at only 1.5 times FY25 EPS targets, indicating a low valuation relative to its growth potential [4] - Analysts have set a price target of $235 for Qualcomm, suggesting significant upside potential [5] Investment Strategy - The stock remains undervalued despite strong quarterly performance and positive guidance, presenting a buying opportunity for investors [6]