Stacy Rasgon: Qualcomm is executing as well as they ever have

Core Viewpoint - Qualcomm has consistently guided above expectations for nine consecutive quarters, yet the market has not rewarded the company accordingly, leading to a perception of being undervalued in the semiconductor sector [2][3]. Company Performance - Qualcomm's significant business with Apple is declining, which is expected to limit earnings per share (EPS) growth, but this decline is well understood by the market [3][7]. - The company is experiencing strong growth in adjacent markets, particularly in the automotive and industrial sectors, with double-digit growth reported [3][4]. - Qualcomm is also exploring opportunities in the data center market, which is projected to be a multi-billion dollar opportunity, although it is not yet reflected in current financial projections [5]. Market Dynamics - Qualcomm's chip revenue from Apple is approximately $8 billion, contributing around $250 million to earnings, with a gradual roll-off expected over the next several years [7]. - Samsung's market share for high-end chips has increased from 40% to 75%, and while there are concerns about a potential decline, the baseline share is expected to remain stable at 75% [9]. Margin Analysis - Concerns regarding margin compression due to competition are deemed unfounded, as Qualcomm's gross margins are stable, falling within the range of 48% to 50% [10].