Qualcomm (NASDAQ: QCOM) pioneered wireless communications and is one of the world’s largest semiconductor and equipment manufacturers. Earlier this month, the company held its inaugural Automotive Investor Day event, following which Tigress Financial Partners analyst Ivan Feinseth penned the key takeaways which kept him bullish. At the event, Qualcomm announced its expansion into new markets, which, according to Feinseth, “creates tremendous growth in new opportunities in both automotive technology and increasing IoT connectivity, which should continue to drive significant long-term shareholder value creation.”
Remarkably, the company is leading the ongoing global 5G broadband network rollout, something which provides a solid secular growth opportunity for the company. “The global 5G high-speed network rollout ramp-up, along with opportunities in other connected technologies that support a broad range of industries, including energy, gaming, healthcare, logistics, manufacturing, retail, AI applications, and high-speed Edge Computing, should drive further upside to our current expectations,” said Feinseth.
Moreover, in the area of auto technology, the uptake of the company’s Snapdragon Digital Chassis, a set of cloud-connected platforms that underpin automotive technology, like digital cockpits and advanced driver assistance systems, is increasing. Notably, almost every leading global automotive manufacturer uses the Chassis for their vehicle systems. Qualcomm currently has a design win pipeline of $30 billion, up from $19 billion at the end of the Fiscal Q3 2022.
Apart from organic growth, Qualcomm has also been driving its business through strategic acquisitions that are allowing it to expand into newer avenues. To this end, Feinseth believes the buyout of car technology company Arriver will increase its ability to develop fully integrated Advanced Driver Assistance System solutions for automakers. Also, Qualcomm is seeking to strengthen its Edge Computing and Cloud capabilities through the recent acquisition of computer chip designer Nuvia.
Coming to financials, Feinseth is encouraged by the sufficient level of liquidity, which is driving strategic investments in tech innovations and other growth initiatives. The company’s strong balance sheet is expected to drive business performance and shareholder value in the long term.
Buoyed by these opportunities, Feinseth maintained his Buy rating on Qualcomm, with a price target of $238, implying 115% upside potential from its current price.
What is the Average Target Price for Qualcomm Stock?
On Wall Street, the average price target on Qualcomm stock is $182.40 currently, indicating 65% upside potential over the next 12 months.
Street analysts are cautiously optimistic about Qualcomm, possibly taking into account the near-term headwinds that are hurting tech stocks in general and chip stocks specifically. The consensus rating on QCOM stock is a Moderate Buy based on 13 Buys and seven Holds.
Conclusion: A Well-Capitalized, Solid Stock for the Long Term
With the deepening roots in edge computing and cloud, expanding presence in the automotive technology market, and rapid rollout of 5G, together with the proliferation of the global connected Internet of Things (IoT), the company is poised for exceptional growth over the long term.
