Semiconductor tech maker Qualcomm (QCOM) has seen its stock price stuck in traffic despite the much more vigorous gains its tech peers have recorded. Over the past 12 months, the stock has been basically flat, up less than 1% and still roughly 20% below its 52-week high. That’s despite the company casually posting some of its best operating results ever, with high-margin engines like automotive and IoT driving free cash flow higher.
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In the meantime, Qualcomm is well-positioned for continued growth, while its valuation has drifted to rather attractive levels. For these reasons, I am bullish on QCOM stock.
Business Results Outshine Sluggish Share Price
If you only glance at Qualcomm’s ticker, you’d never guess how busy the underlying business has been. In fiscal 2025, Qualcomm generated $44.3 billion in revenue, up 14% year over year. Adjusted EPS came in at $12.03, up 18% from the prior year, despite absorbing a huge U.S. tax-law change on the GAAP side.
Most of the action is inside QCT, the chip division. QCT revenue hit a record $38.4 billion in the fiscal year, up 16% year over year, with earnings before tax up 22%. Interestingly, management highlighted that non-Apple (AAPL) QCT revenue grew 18% and that the combined automotive and IoT segment grew 27% for the year. I am really happy to see QCOM further diversify its cash flow mix.
Other highlights include Auto revenue jumping 36% to about $4 billion, surpassing the $1 billion-per-quarter mark, driven by Snapdragon Digital Chassis content and new ADAS wins. Notably, Qualcomm’s design-win pipeline in auto is estimated at ~$45 billion, and analysts see the segment tracking toward roughly $8 billion in annual revenue by fiscal 2029.
Notably, IoT revenue grew 22% to ~$6.6 billion, spanning industrial devices, networking, and XR (mixed-reality headsets and smart glasses). The company has even called out XR as a $2 billion business now, well ahead of its earlier expectations.
The Next Financial Year is Even More Audacious
The next question is about whether this growth actually continues or if 2025 is a one-off rebound. The former is likely the correct answer, as the company is set to benefit from several positive catalysts this year. For instance, Qualcomm’s Snapdragon X series has evolved from curiosity to a genuine Windows on Arm platform. The company says it already has over 60 laptop designs in production and expects more than 100 Snapdragon X-powered PCs by 2026. Further, Microsoft (MSFT) is leaning in with new Copilot+ Surface devices built around Snapdragon X Plus chips, including lower-priced models aimed at students and mainstream buyers.
In addition, Qualcomm unveiled its AI200 and AI250 accelerators for data centers last month, targeting energy-efficient AI inference rather than training. The AI200 is planned to launch in 2026, with early deployments including a significant partnership in Saudi Arabia that could use up to 200 megawatts of Qualcomm-based systems. If even a slice of that roadmap generates recurring revenue, the 2026–2027 numbers have meaningful upside optionality.
Lastly, I believe many investors overlook the Automotive segment, which just broke the $1 billion-per-quarter barrier while its design-win pipeline continues to expand. Management’s recent commentary points to dozens of new ADAS wins and a pipeline of around $45 billion in future business. That won’t, of course, all show up in 2026, but each model year locks in more high-margin revenue.
A Flat Price With a Fat Discount
However, despite these developments, QCOM trades like a slightly above-average industrial stock. At around $162 per share, Qualcomm’s forward P/E sits near 13.4x based on a fiscal 2026 consensus EPS estimate of roughly $12.11. That’s well below many large-cap chip and AI names, even though Qualcomm has meaningful exposure to the same AI and cloud themes. For context, the overall tech sector is trading at an average forward P/E of about 23x.
Also note that Qualcomm generated about $12.8 billion in free cash flow, implying a free-cash-flow yield of roughly 7% at today’s market cap, plus a 2.2% dividend yield with ongoing buybacks that retired about 2% of shares outstanding. The “shareholder yield” is therefore very compelling today, and so I believe QCOM’s recent underperformance will soon shift to an upward trend.
Is Qualcomm a Good Stock to Buy Now?
QCOM currently holds a Moderate Buy consensus on Wall Street, based on the view of 18 analysts. Qualcomm stock now carries 12 Buy, five Hold, and just one Sell rating. At $197.67, the average QCOM stock price forecast implies 18% upside potential over the next 12 months.
Final Thoughts
All in all, Qualcomm has rock-solid fundamentals and exciting growth drivers. Further, its increasingly attractive valuation paints a far brighter picture than this year’s stagnant share price suggests. Its momentum is building across the board, and the company appears poised for meaningful upside. As these catalysts unfold, QCOM’s stock looks primed to finally break out of its muted trading range.