Qualcomm: Analyst Opinions Split, But Upside Potential Remains

Core Viewpoint - Qualcomm's stock has shown a modest rally post-earnings, closing just under $140, despite being down approximately 6% from pre-earnings levels, indicating market indecision regarding its long-term positioning [1][2]. Financial Performance - Qualcomm reported an EPS of $2.85, beating consensus by $0.04, and revenue of $10.98 billion, reflecting a nearly 17% year-over-year increase [12]. - Handset sales increased by 12%, automotive revenue surged by 59%, and IoT sales jumped by 27%, showcasing strong performance across key segments [12]. Analyst Ratings and Price Targets - Analysts have mixed views; some maintain bullish stances with price targets significantly above the current trading level, such as Baird's target of $216, implying a 55% potential upside [4]. - Conversely, Wells Fargo has an Underweight rating with a price target of $140, citing concerns over China exposure and declining Apple-related revenue [7]. - Benchmark slightly lowered its price target to $200 from $240, while still noting broad-based demand across Qualcomm's segments [5][6]. Market Sentiment and Valuation - Qualcomm's P/E ratio stands at 14.90, which is a deep discount compared to peers like NVIDIA and AMD, making it attractive for investors seeking value [9]. - Despite strong financials, the market remains cautious, looking for clearer signs of demand recovery and growth beyond smartphones [10]. Long-Term Growth Drivers - Qualcomm's long-term growth drivers, including its expanding presence in automotive and AI sectors, support its investment case, even amidst current market uncertainties [13][14].