Is Qualcomm Stock a Smart Buy Before Q3 Earnings Release?

Core Insights - Qualcomm is set to report its third-quarter fiscal 2025 earnings on July 30, 2025, with revenue and earnings estimates at $10.36 billion and $2.68 per share respectively [1] - The earnings estimate for fiscal 2025 has decreased by 0.26% over the past 60 days, while the estimate for fiscal 2026 has declined by 1.99% [1] Earnings Performance - Qualcomm has a four-quarter earnings surprise average of 6.43%, having beaten estimates in each quarter, with the last reported quarter showing a surprise of 0.71% [3][4] Earnings Predictions - The company has a positive Earnings ESP of +0.60% and a Zacks Rank of 3, indicating a likelihood of an earnings beat for the upcoming quarter [5][6] Recent Developments - Qualcomm launched the Snapdragon 7 Gen 4 Mobile Platform, enhancing AI performance and gaming capabilities, which has gained traction among leading OEMs like HONOR and vivo [7][8] - The company has been selected by e& to enhance digital infrastructure in the UAE and is involved in Saudi Arabia's Vision 2030 initiative, focusing on AI and 5G technologies [9] - Recent acquisitions include Autotalks for V2X technology, MovianAI for generative AI capabilities, and a definitive agreement to acquire Alphawave Semi for approximately $2.4 billion, aimed at enhancing AI capabilities [10][11] Market Performance - Over the past year, Qualcomm's stock has decreased by 10.3%, underperforming the industry growth of 41%, while competitors like Broadcom have seen significant gains [12] Valuation Metrics - Qualcomm's shares are trading at a forward P/E ratio of 13.44, which is lower than the industry average of 34.13 and below its historical mean of 16.97, indicating a relatively cheaper valuation [13] Strategic Focus - The company aims to lead in AI innovation through strategic acquisitions and R&D initiatives, targeting various industries including smartphones and automotive [16] - Qualcomm is experiencing strong demand in the premium handset market but faces margin pressures in the mid-range segment due to competition from low-cost chipmakers [17] Competitive Landscape - Despite challenges, Intel remains a significant competitor in chipset development, particularly in the AI PC sector, which could impact Qualcomm's expansion in that area [18] Long-term Outlook - While current earnings estimates show bearish sentiment, Qualcomm's focus on AI initiatives and diversification of its portfolio positions it well for long-term growth, particularly in high-end smartphones and IoT [20]