Qualcomm (QCOM) Upgraded to Buy: Here's What You Should Know

Zacks Rating Upgrade for Qualcomm - Qualcomm has been upgraded to a Zacks Rank 2 (Buy), reflecting an upward trend in earnings estimates, which is a powerful force impacting stock prices [1] - The Zacks rating system is based on a company's changing earnings picture, specifically the Zacks Consensus Estimate for current and future years [1] - The upgrade indicates a positive earnings outlook for Qualcomm, which could favorably impact its stock price [3] Earnings Estimate Revisions and Stock Price Correlation - Changes in a company's future earnings potential, reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [4] - Institutional investors use earnings estimates to calculate fair value, leading to bulk investment actions that drive stock price movements [4] - For Qualcomm, rising earnings estimates and the rating upgrade signify an improvement in the company's underlying business, which should push the stock higher [5] Zacks Rank System and Earnings Estimate Revisions - The Zacks Rank system uses four factors related to earnings estimates to classify stocks into five groups, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7] - Tracking earnings estimate revisions can be rewarding, as empirical research shows a strong correlation with near-term stock movements [6] - Qualcomm's placement in the top 20% of Zacks-covered stocks indicates superior earnings estimate revisions, making it a solid candidate for market-beating returns [10] Qualcomm's Earnings Estimate Revisions - For the fiscal year ending September 2025, Qualcomm is expected to earn $11.14 per share, a 9% increase from the year-ago reported number [8] - Over the past three months, the Zacks Consensus Estimate for Qualcomm has increased by 4.1% [8] Zacks Rating System Overview - The Zacks rating system maintains an equal proportion of 'buy' and 'sell' ratings for over 4000 stocks, with only the top 5% receiving a 'Strong Buy' rating and the next 15% receiving a 'Buy' rating [9] - Qualcomm's upgrade to Zacks Rank 2 positions it in the top 20% of Zacks-covered stocks, implying potential for near-term stock price appreciation [10]