Core Viewpoint - Qualcomm's stock price drop of 4% post-earnings release is unjustified as analysts find no fundamental factors supporting such a reaction [1][25][38] Financial Performance - Qualcomm reported revenues of $9.82 billion for Q4FY25, a 13% year-over-year increase, with mobile device revenue at $6.96 billion (up 14%), automotive revenue at $1.05 billion (up 17%), and IoT revenue at $1.81 billion (up 7%) [8][9] - The company’s non-GAAP earnings per share (EPS) for Q4FY25 was $3.00, a 12% increase from $2.69 in Q4FY24 [9] - The QCT segment, which drives over 80% of revenue, showed strong performance with a 13% revenue increase [5][9] Market Perception - The market has mischaracterized Qualcomm as merely another "AI stock," leading to a perception that its valuation needs to revert to a more reasonable level [2] - Qualcomm's current P/E ratio is around 16-17, which is considered reasonable compared to much higher valuations in the tech sector [2][30] Growth Drivers - Qualcomm's non-Apple business is expected to grow at a compound annual growth rate (CAGR) of 15% over the next five years, with the last two years showing a CAGR of 17-18% [11] - The automotive and IoT segments are also projected to grow significantly, with automotive expected to grow at a CAGR of 27% over the next year [13] Tax and Cash Flow - The recent stock price decline was influenced by a $5.7 billion tax expense, which is a non-cash accounting adjustment related to new U.S. tax laws, not affecting actual cash flow [18][25] - Qualcomm's tax rate is expected to stabilize between 13-14%, with actual cash tax payments anticipated to be lower than expected [18] Competitive Position - Qualcomm is focusing on edge-to-cloud AI solutions, differentiating itself from competitors like NVIDIA by emphasizing cost-effective inference rather than model training [20] - The company has partnered with HUMAIN in Saudi Arabia to launch a hybrid edge-cloud AI inference service, indicating its commitment to AI development [20] Valuation and Future Outlook - Analysts believe Qualcomm's current valuation is significantly discounted compared to industry peers, with a target P/E ratio of 18 being more appropriate [30][36] - The company’s ability to maintain a stable profit margin in the QCT segment and continued growth in mobile devices and automotive sectors are critical for achieving this valuation [37]