The AI revolution continues to propel those companies engaged in supporting the development of the game-changing technology to new heights. While Nvidia’s remarkable growth has rightly captured investors’ attention, other players are also capitalizing on the opportunities.
Qualcomm (NASDAQ:QCOM) stands out as a potential market leader. The company has developed chipsets with the capacity to efficiently run AI algorithms on local devices. Qualcomm’s Snapdragon 7 Plus Gen 3 is a hardware chip tailored for AI algorithms on mid-range phones. Additionally, the Snapdragon 8S Gen 3, a more affordable and slightly less capable version of the premium Snapdragon 8 Gen 3, powers Samsung’s Galaxy S24 Series.
Furthermore, the rebound in global smartphone purchases, particularly from the Chinese market, has contributed to QCOM’s latest Q2 earnings. The semiconductor maker reported a solid quarter, with revenues reaching $9.39 billion, surpassing expectations by roughly $40 million. Furthermore, an EPS of $2.44 exceeded consensus estimates by $0.12.
Looking ahead, Qualcomm anticipates its 2024 revenues to reach $38.31 billion, surpassing the $35.83 billion figure from 2023, with further expansion expected in 2025 to $41.75 billion.
Investors have taken notice, driving Qualcomm shares up by an impressive 101% over the past year.
Rosenblatt Securities’ Kevin Cassidy, a 5-star analyst rated in the top 2% of the Street’s stock pros, shares this optimism, seeing Qualcomm strategically positioned to capitalize on multiple revenue streams going forward.
“We see Qualcomm as leading the market in delivering AI and Gen AI to network edge applications in smartphones, PCs, automobiles and IoT devices,” says Cassidy.
Cassidy spotlights Qualcomm’s partnership with Microsoft via the deployment of the semiconductor maker’s Snapdragon X Elite chipset as one particularly compelling development.
“The new Snapdragon X Elite chipset, set to be unveiled (at the upcoming Microsoft Build event), is expected to revolutionize Windows laptops with superior AI capabilities, enhanced multi-core performance, and significantly improved battery life, making them competitive with Apple’s latest offerings,” Cassidy opined.
It also appears that Dell will be adopting the new Snapdragon chipset. Cassidy says that this integration would enable the PC-maker to “nearly double battery life compared to current models using Intel chips and reduce CPU costs by 50%.”
With such sound prospects ahead, Cassidy has now raised his price target for QCOM shares from the prior $200 to a Street-high of $240, suggesting the stock will gain 19.5% over the coming months. Cassidy’s rating stays a Buy. (To watch Cassidy’s track record, click here)
Looking at the consensus breakdown, Cassidy finds support from 18 other analysts in the bullish camp. However, 8 analysts remain neutral with Hold ratings, while 1 advises to ‘Sell’, resulting in a Moderate Buy consensus rating. Meanwhile, the average price target of $190.08 hints at a possible 6% dip in value. (See QCOM stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
