Qualcomm's Stock Struggles Despite Strong Earnings Growth

Qualcomm Inc. (QCOM) shows solid financials but faces muted stock reactions. Despite strong earnings beat and promising growth in AI, investor hesitance may hinder recovery amid broader market trends. Analysts remain optimistic for sizable upside potential.

Date: 21-03-2025

AI Rating: 6

Earnings & Revenue Growth
Qualcomm has recently reported record revenue and strong earnings per share (EPS), significantly beating analyst expectations. However, despite these impressive financial results, the stock price remains down 10 percent since the last week of February, which may disconnect the perceived value of the stock from its actual financial health.

Valuation Metrics
Currently, Qualcomm is trading at a price-to-earnings (PE) ratio of just 17, which is considerably lower than that of its peers in the semiconductor industry, such as Micron Technology (PE at 30), NVIDIA (PE at 40), and AMD (PE at 105). This stark contrast suggests that Qualcomm could be undervalued in the market, indicating potential for price recovery as investors regain confidence.

Future Outlook
Analysts have provided a bullish outlook on Qualcomm, maintaining higher price targets post-earnings report. For instance, Piper Sandler has set a target price of $190, while Benchmark has set a target of $240, indicating more than a 50% upside from current trading levels of $158. This suggests a substantial potential for price appreciation among investors if the company continues to expand its reach into AI, automotive, and smartphone markets.

Technical Analysis
The technical indicators, such as the stock's relative strength index (RSI) sitting at 46, signal slightly oversold conditions. Additionally, a potential bullish crossover in MACD indicates that momentum might be shifting positively, while recent price action suggests that a support level may be forming at the lower end of its trading range.

Investors' hesitation continues mainly due to concerns around smartphone demand; however, Qualcomm's strong growth in AI capabilities could provide significant upside potential in its market performance.

Stocks: QCOM MU NVDA AMD