Qualcomm’s Buy Rating Affirmed Amid Smartphone Market Recovery and AI Edge Opportunities

J.P. Morgan analyst Samik Chatterjee has maintained their bullish stance on QCOM stock, giving a Buy rating on April 23.

Samik Chatterjee has given his Buy rating due to a combination of factors including the expected gradual recovery in the smartphone market and the emerging AI opportunities at the edge. Chatterjee’s analysis suggests that Qualcomm’s revenues are likely to see single-digit growth year over year in FY24, with a stronger acceleration into double-digit growth anticipated from FY25. This projection aligns with the broader market dynamics, evidenced by MediaTek’s recent results and guidance, which indicates a more tempered recovery in smartphone demand, aligning with Qualcomm’s expected performance trajectory.
Additionally, the shift towards 5G and higher-end smartphone models is expected to support revenue growth in dollar terms, moving closer to low teens. Chatterjee also points out the AI opportunity at the edge, particularly in smartphones, which are poised to become key devices for content creation and personal assistance powered by AI. Qualcomm’s positioning in this space, with AI-APUs and software tools that support AI models, underpins the Buy rating as the company is expected to benefit from these mid to long-term market evolutions.

In another report released on April 23, Benchmark Co. also initiated coverage with a Buy rating on the stock with a $200.00 price target.

QCOM’s price has also changed dramatically for the past six months – from $105.620 to $165.660, which is a 56.85% increase.

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Qualcomm (QCOM) Company Description:

QUALCOMM, Inc. develops and sells wireless telecommunications products and services that are used in mobile devices and other wireless products (including network equipment, broadband gateway equipment, consumer electronic devices and other connected devices) as well as in automotive and internet of things (IoT). It operates through three segments: Qualcomm CDMA Technologies (QCT) semicondutor business, Qualcomm Technology Licensing (QTL), and Qualcomm Strategic Initiatives (QSI). The company was founded by Franklin P. Antonio, Adelia A. Coffman, Andrew Cohen, Klein Gilhousen, Irwin Mark Jacobs, Andrew J. Viterbi, and Harvey P. White in July 1985 and is headquartered in San Diego, CA.