Where Will Qualcomm Stock Be in 3 Years?

Core Viewpoint - Qualcomm is poised for a recovery driven by the growth of AI-enabled smartphones, despite recent underperformance in the smartphone market [1][2]. Group 1: Recent Performance and Guidance - Qualcomm's quarterly revenue for Q3 fiscal 2024 increased by 11% year over year to $9.4 billion, with adjusted earnings rising 25% to$ 2.33 per share, surpassing Wall Street expectations [3]. - The company anticipates revenue of $9.9 billion and earnings of$ 2.55 per share for the current quarter, indicating a year-over-year revenue increase of 14% and a bottom-line growth of 26% [4]. - Despite positive results, Qualcomm's stock fell over 5% after the earnings release due to concerns about slow recovery in the smartphone market [5]. Group 2: Market Trends and AI Impact - The overall smartphone market is expected to grow at a "flattish to low single digits," but premium smartphones and AI-enabled devices are experiencing faster growth [5][6]. - Shipments of generative-AI-enabled smartphones are projected to quadruple from 2024 to 2027, with these devices expected to account for 43% of global smartphone shipments by 2027, up from 11% this year [6]. Group 3: Future Growth Prospects - Qualcomm is projected to end the current fiscal year with revenue of $38.6 billion, an 8% increase from the previous year, with fiscal 2025 revenue growth expected to exceed 10% [7]. - If Qualcomm achieves a 15% annual earnings growth rate over the next three years, its earnings per share could rise to$ 15, potentially doubling its current stock price to $345 [8]. - The current price-to-earnings ratio of Qualcomm suggests it is undervalued compared to the Nasdaq-100, presenting a solid investment opportunity [8].