Since finally overcoming its outstanding lawsuit with Apple (AAPL) in December, Qualcomm (QCOM) has put itself in a solid position to thrive in light of the 5G revolution. The mobile chip giant expects earnings will increase more than a whopping 50% in 2021 and at a rate of roughly 25% through 2026. Those figures may seem ambitious, but they are definitely attainable as the 5G chip market is expected to grow by a massive 88% over that same time-frame.
Indeed, Rosenblatt analyst Kevin Cassidy, who is ranked in top 100 of more than 14,000 experts on TipRanks, is confident that the mainstream adoption of 5G is imminent and will be widespread, affirming that Qualcomm is strategically positioned to take full advantage of the trend for years to come.
The 5-star analyst views 5G revolution as an essential driver for QCOM for several reasons, including its rapid adoption, extensive applications, and industry-breaking capabilities.
Above all, Cassidy envisions 5G technology being the quintessential growth driver in tech sector for what could be more than a decade. Presently, carrier companies are integrating 5G into their cellular networks across the globe, and the analyst estimates that “Qualcomm’s dollar content per handset [will] increase 25% to 50%” relative to those operating with 4G. Even more promising, though, is the “technology’s ability to connect ‘things-to-things.’” The major differentiator between 5G and all previous networks is its ability to exchange data among all sorts of objects and devices, including cars, traffic lights, factories, and more.
Cassidy is confident that the long-term implications of 5G will work heavily in Qualcomm’s favor. Even if the pandemic does bring more economic slowdown, more people and businesses will be relying on 5G technology to communicate from home to be optimally efficient. Widespread adoption of the technology is inevitable, and QCOM will be ready to capitalize.
To this end, Cassidy rates QCOM an Overweight along with an annual price target of $105, which implies about 22% upside from current levels. (To watch Cassidy’s track record, click here)
TipRanks is not quite as keen on QCOM, but nevertheless exhibits the stock as a Moderate Buy. Out of the 19 analysts offering ratings on Qualcomm, 10 say Buy, 6 suggest Hold, and 3 recommend Sell. With a 12-month average price target of $89.73, the stock suggests a modest upside of 4% (See QCOM stock-price forecast on TipRanks).
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