Shares of Qualcomm (QCOM) slipped in after-hours trading despite revealing ambitious growth targets at its investor event. In fact, it is forecasting $8 billion in automotive chip revenue and $8 billion in PC chip sales by Fiscal Year 2029. Qualcomm is known as the top supplier of mobile phone chips.
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Still, it has been diversifying its portfolio by securing partnerships with automakers like General Motors (GM) for dashboard and driver-assistance chips. It is also working with Microsoft and PC makers to compete against Intel (INTC) and AMD (AMD) in the laptop market.
Despite starting relatively recently in the PC chip market, Qualcomm still expects significant growth. Meanwhile, its automotive segment already saw $889 million in revenue last quarter, up 68% year-over-year. Furthermore, CEO Cristiano Amon believes that Qualcomm has the potential to have an $800 billion total addressable market by 2030. It is clear that Qualcomm is serious about expanding its operations and becoming a bigger player in the semiconductor industry.
Mobile Chips Remain Qualcomm’s Most Important Segment
Although Qualcomm is trying to diversify, the smartphone market remains its most important segment, which, interestingly, is splitting into two main segments, according to 4.6-star analyst Thomas O’Malley. In fact, there is strong demand for premium Android devices, which benefits Qualcomm since its Snapdragon 8 Gen 4 is performing well in the high-end market.
At the same time, Qualcomm’s aggressive pricing at the low end of the market also gives it an advantage. This has essentially led to a shrinking mid-tier smartphone market that is likely to hurt suppliers like Skyworks Solutions (SWKS) and Qorvo (QRVO) in the long run.
In addition, O’Malley added that Qualcomm is expected to supply 100% of the chips for Samsung’s Galaxy S25 since Samsung’s performance on 3-nanometer chips prevents it from internally ramping up production. It is worth noting that O’Malley has a Buy rating on Qualcomm with a $200 price target. He also has a solid track record on QCOM stock, with an 86% success rate and an average return of 17% per rating.
Is Qualcomm a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on QCOM stock based on 11 Buys, eight Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 30% rally in its share price over the past year, the average QCOM price target of $202.82 per share implies 23.1% upside potential.
