Qualcomm Incorporated (NASDAQ: QCOM) is a leading maker of wireless telecommunications products and services. These products are used in devices such as mobile, network equipment, automotive and internet of things (IoT), and connected devices.
Last month, the company posted upbeat results in the first quarter of 2022. Elevated consumer demand for high-end processor technologies and the company’s diversification strategy came to the rescue.
Recently, Qualcomm CEO Cristiano Renno Amon said that he expects continued positive momentum for chip makers on elevated demand for “better phones.”
Amon commented, “Qualcomm has redefined its mobile strategy to be focused on premium and high-tier, and we’re winning share in a flat market. For example, with devices such as the Samsung Galaxy, we had a 40% share and now we have in excess of 75%.”
According to Amon, the COVID-19 pandemic has made users more reliant on smartphones due to their usability for communications such as meetings, official work, and family networks. They are on the lookout for better phones with more functions. Therefore, Amon believes that the mobile market would continue to remain stable despite the gloomy market scenario and worldwide recession threat.
Furthermore, he believes that “Augmented reality could be as big as phones.”
Interestingly, Qualcomm’s technologies complement augmented and virtual reality devices. Therefore, along with big giants including Meta Platforms (FB), Microsoft Inc (MSFT), and TikTok, the company is expected to experience high-end growth in this segment as well.
Wall Street’s Take
Considering the broad sell-off in the market as attractive buying opportunities for chip stocks, recently, Piper Sandler analyst Harsh Kumar maintained a Buy rating on Qualcomm but did not assign a price target.
As China exits COVID-19 lockdowns, Kumar expects semiconductor businesses to perform better due to fewer supply chain difficulties.
Kumar commented, “We are a bit baffled by the steep declines in semiconductor stocks. We are moving to a more positive stance on semiconductor stocks following our more cautious approach since the beginning of the year.”
The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 12 Buys and seven Holds. The average Qualcomm price target of $192.06 implies 46.35% upside potential. Shares have remained almost stable over the past year.
News Sentiment for Qualcomm is currently Positive based on 26 articles over the past seven days. 80% of the articles on QCOM have a Bullish sentiment, compared to a sector average of 62%.
Qualcomm has lost 29.23% of its value year-to-date but has provided stable gains over the past year. Therefore, based on the CEO’s upbeat comments related to demand-supply balance and near-term growth opportunities, investors could consider the current scenario as an attractive buying opportunity.
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