Qualcomm (QCOM) stock has taken a beating, sliding more than 30% over the past year, weighed down by investor concerns over smartphone market slowdowns and geopolitical tensions impacting chip demand. Yet the company’s latest numbers tell a different story, showcasing robust growth, record revenues, and no signs of stalling. In fact, Qualcomm’s current valuation might be a screaming buy given its strong fundamentals and tailwinds in multiple sectors, hinting at serious upside for investors willing to look past the noise.
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My analysis indicates QCOM is set for a strong recovery following a year of sideways trade.
Powering the 5G Revolution
Qualcomm’s dominance in 5G technology remains its primary growth driver. In its latest Q2 report, the company achieved $9.5 billion in revenue from its Qualcomm CDMA Technologies (QCT) segment, up 18% year-over-year, driven by its Snapdragon processors and 5G modem platforms like the X85. These chips power premium smartphones from brands like Xiaomi, which recently extended its multi-year deal with Qualcomm, ensuring its flagship devices use Snapdragon 8-series chips through at least 2030.
With global 5G connections projected to hit 2 billion by 2025, Qualcomm’s intellectual property and licensing arm (QTL) continues to vacuum in royalties, contributing $1.3 billion in Q2 alone.
Also, Qualcomm’s 5G technology is now making inroads beyond mobile devices, powering transformative applications in new sectors. The company has secured partnerships to integrate 5G into private networks for industrial automation, enabling real-time data processing for smart factories, as seen in collaborations with firms like Siemens (SIE). Moreover, its chips are now driving connectivity in smart city projects, with deployments in urban infrastructure expected to grow as global investments in smart cities reach $1.8 trillion by 2030.
Automotive and IoT Emerge as New Growth Engines
Besides its core 5G offerings, Qualcomm’s diversification into automotive and IoT is paying off big time. In Q2, its automotive segment soared 59% year-over-year, generating notable revenue as carmakers adopt Snapdragon Digital Chassis for connected and autonomous vehicles.
Partnerships with major automakers, including contracts to supply chips for next-gen electric cars, are pretty interesting (and relevant to the valuation argument I will make later), as they show Qualcomm’s pivot from smartphone reliance. The IoT segment wasn’t far behind, growing 27% as demand for smart home devices and industrial IoT solutions surges.
By branching out and reducing its dependence on the cyclical smartphone market, Qualcomm is stripping the volatility out of its cash flows. For example, its chips are now integral to automotive safety systems and infotainment, markets expected to grow at a 10% CAGR through 2030. Qualcomm’s automotive revenue is projected to reach $8 billion annually by 2030, per analyst estimates, bolstering its long-term growth as these segments scale.
AI and Data Centers: The Next Frontier
Finally, Qualcomm is turning heads with a renewed focus on AI and data centers. At Computex 2025, CEO Cristiano Amon shared plans for the company’s return to the data center market through a partnership with Nvidia (NVDA). Together, they’re developing custom Arm-based CPUs built for AI workloads. The goal is to offer a more energy-efficient alternative and take on established players like Intel (INTC) and AMD (AMD).
Look at Qualcomm’s chips, which are starting to penetrate the PC market. Q2 results showed solid growth in laptops built for AI features. Qualcomm’s focus on on-device AI, which improves privacy and efficiency, is already drawing interest from major partners like Microsoft (MSFT). With the AI chip market expected to grow around 30% annually through 2030, Qualcomm’s early push could lead to strong new revenue, expand its business, and improve profit margins.
Deep Value with Room to Run
Despite these wins, Qualcomm’s stock is trading in what looks like deep value territory. The company has seen its shares decline consistently over the past year, and yet its profitability surges. EPS jumped 30% to $2.85 in Q2, well ahead of forecasts, leaving the stock trading at just 12x this year’s projected earnings.
At this multiple, I believe the tech giant is priced like a bargain. Historically, Qualcomm’s cyclical exposure justified lower multiples, but today’s 5G, automotive, and AI tailwinds are structural, not fleeting.
These trends suggest Qualcomm’s earnings growth, expected at 10-12% annually over the next five years, could drive significant upside. If the market begins to value Qualcomm more like its tech peers, many of which command premium valuations due to their recurring revenue models, and Qualcomm is now showing similar characteristics, then the combination of earnings growth and a higher valuation multiple could drive significant gains.
Is Qualcomm Stock a Buy, Sell, or Hold?
Following its extended selloff, Wall Street analysts are more optimistic about QCOM’s prospects. Specifically, QCOM stock features a Moderate Buy consensus rating based on eight Buy, eight Hold, and one Sell recommendations over the past three months. At $178.31, the average QCOM stock price target implies an upside potential of ~23% from the current levels.
Qualcomm: A Spec Play in the Semiconductor Space
Qualcomm’s stock may be down, but it’s hardly out. With strong leadership in 5G, rapid growth in automotive and IoT, and an ambitious move into AI and data centers, the company is firing on all cylinders. At what appears to be a bargain valuation, the potential for earnings growth and multiple expansion is hard to overlook. While the semiconductor industry is known for its cyclical nature, Qualcomm’s diversified growth and solid fundamentals make it an attractive option for value-focused investors seeking meaningful upside.