If Qualcomm Holds $145, Its Next Move Could Be Massive

Core Viewpoint - Qualcomm Inc. has consistently beaten earnings expectations and operates in a strong sector, yet its stock has underperformed, raising concerns among long-term investors while potentially creating an attractive entry point for new investors [1][2][4]. Group 1: Stock Performance - Qualcomm's stock is down 3% for the year, contrasting with the S&P 500's gain of over 8% and NVIDIA's impressive 35% increase [2]. - A recent 10% drop in July has broken a steady uptrend, prompting questions about the stock's future direction [2]. Group 2: Business Fundamentals - Despite stock price challenges, Qualcomm's underlying performance remains solid, with resilience in core markets such as mobile and automotive [4]. - Management has addressed concerns regarding business loss from Apple, which is shifting production in-house [4]. Group 3: Market Context - The semiconductor sector is thriving, as evidenced by the iShares Semiconductor ETF, which has risen over 50% since April, indicating strong growth potential in the industry [5]. - Qualcomm's underperformance is viewed as an anomaly rather than a sign of fundamental weakness [5]. Group 4: Valuation and Analyst Support - Qualcomm's P/E ratio is 14, significantly lower than the broader market and sector peers, presenting a buying opportunity at a bargain multiple [7]. - Recent analyst support includes Buy ratings from firms like Piper Sandler and JPMorgan, with price targets as high as $225, suggesting substantial upside potential [8]. Group 5: Technical Analysis - The technical setup indicates a potential short-term trading opportunity, as Qualcomm shares have not set new lows recently, suggesting that selling pressure may be easing [9][10]. - If the stock can maintain above $145 and reclaim $150, it could trigger a reversal towards the $160 mark [10]. Group 6: Investor Sentiment - Qualcomm is perceived as a frustrating stock due to its tendency to lag in strong markets, which has tested investor patience [11]. - Momentum traders are advised to wait for a clear break above $150 before committing, while long-term investors may seek evidence of operational success translating into stock performance [12].