Qualcomm Nasdaq: Qcom is one of the leading semiconductor companies whose stock could be ready to take off in 2025. In 2024, shares had a banner year, rising 57% by mid-June. However, by early August, shares declined, losing more than 30% of their value from the peak. Harmful developments emerged that shattered the optimism that many had.
Qualcomm today
As of 01/17/2025 at 04:00 PM ET
- 52 week range
- $139.26
▼
$230.63
- Dividend yield
- 2.07%
- P/E ratio
- 18.30
- Price target
- $206.57
Stocks recovered slightly from September to October, but ended the year lower than their August lows. Now that the company has resolved and/or mitigated the major issues. A new bull cycle may await the stock. This has already begun to happen to some extent. As of noon ET trading on January 17, Qualcomm shares were up more than 7% annually. Additionally, based on new analyst ratings tracked by MarketBeat, Wall Street is seeing a strong rally in the stock. The average of two price targets released on January from Barclays and Mizuho means a 21% up.
Below, I’ll detail the developments that put a dark cloud over Qualcomm in the second half of 2024 and show how they played out. I will also describe new developments around the company that could be growth drivers in the new year.
Apple’s Qualcomm problem and efforts to mitigate it
One issue surrounding Qualcomm for years is its relationship with major customer Apple Nasdaq: App. For a long time, Qualcomm has provided the 5G modems that Apple puts in its wildly popular iPhones. These modems are essentially the chips that allow Apple devices to connect to 5G networks. For at least half a decade, Apple, According to Bloomberg technology analyst Mark GurmanAnd build its own 5G modem.
In 2023, Qualcomm It renewed its deal to supply iPhones Until 2027. However, in mid-2024, rumors spread that Apple would soon use its own modems. These rumors appear to be true, as the company will put its modem in the low-cost iPhone SE in 2025. By 2027, Apple expects a complete phase-out of Qualcomm modems.
QUALCOMM MarketRank™ Stock Analysis
- Total MarketRank™
- 100%
- Analyst evaluation
- Moderate purchase
- Upside/Downside
- 25.5% up
- Short interest level
- correct
- Earnings power
- strong
- Environmental outcome
- -0.89
- News feelings
- 1.09
- Insider trading
- Selling shares
- project. Earnings growth
- 15.51%
See full analysis
However, Qualcomm has realized that this has been a basic imperative for a long time. Its business has been significantly diversified because of this. The company’s automotive and Internet of Things (IoT) business now exceeds that of its business with Apple. Last year, approx $2.6 billion in revenuewhile Apple’s revenues were roughly in the less than $2 billion range.
In addition, Qualcomm expects its automotive and IoT businesses to grow much faster. In the first quarter of 2025, the company expects a “mid-single-digit” increase in phone revenue compared to the previous quarter. However, it expects IoT revenues to grow by more than 20% and automotive revenues to increase by 50%. Over the next several years, the company sees combined growth in these segments Exceeding 20% annually.
Winning the ARM dispute, AI-powered computers can provide growth
Another issue hanging over the company is litigation with ARM NASDAQ:ARM. In December, The jury found Qualcomm’s AI-PC chipset is properly licensed with Arm. This gives the company the green light to continue selling components and grow its PC business, a key pillar of its IoT growth strategy. Arm says it will file more lawsuits, but this is still a win for Qualcomm.
However, Qualcomm’s AI-powered computers have other issues and news surrounding them. In 2024, reports indicate that there will be many requests Not compatible with chips. This includes popular games like Fortnite and League of Legends. Overall, industry analysts point out that other laptops have superior gaming performance. However, Qualcomm recently announced that its latest chipset will power AI-enabled laptops for $600. This lower price could boost PC sales. The company aims to generate billions in revenue from this market over the next few years.
Also, Qualcomm’s weak laptop gaming capabilities may not matter to many customers. Data from 2023 shows that gamers significantly prefer gaming on desktops over laptops. only 13% of gamers are likely to play on laptops. This suggests that Qualcomm’s laptop gaming issues may not drive many customers away.
Qualcomm is preparing for the big year 2025?
Overall, with many of the issues behind them or largely mitigated, Qualcomm stock could be ready to take off in 2025. The issues with its laptops may be exaggerated, meaning they could beat expectations. The company’s automotive and IoT growth drivers are showing promising results. It mitigates the blow of a declining relationship with Apple. Plus, the company has the nice added bonus of being a chip stock that offers a solid 2% dividend yield.
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