Balancing Cyclical Smartphone Headwinds with Growing Auto and IoT Diversification: Justifying a Buy on Qualcomm

Analyst Joshua Buchalter of TD Cowen maintained a Buy rating on Qualcomm, reducing the price target to $150.00.

Joshua Buchalter has given his Buy rating due to a combination of factors that balance near‑term handset weakness against strengthening diversification drivers. While Qualcomm’s guidance for the upcoming quarter was pressured by industry‑wide memory shortages that are constraining smartphone production, particularly at Chinese OEMs, he views these issues as external, cyclical headwinds rather than structural problems with Qualcomm’s business. The company is expected to benefit from OEMs prioritizing premium-tier devices, a segment where Qualcomm maintains a dominant position, helping to cushion the impact on profitability and licensing. Although these dynamics create additional narrative pressure around the already challenged smartphone segment and raise questions about fiscal 2026 amid the Apple modem transition, they do not fundamentally alter the long-term investment case.

At the same time, Buchalter highlights that Qualcomm’s diversification strategy is gaining traction, with non-handset areas now accounting for roughly a third of QCT revenue and showing healthier trends. The automotive segment, in particular, is emerging as a key growth engine, with guidance pointing to a notable ramp in auto revenue as past design wins begin to translate into meaningful sales, initially in infotainment and later expanding into advanced driver-assistance systems. This growing contribution from Auto, along with broader IoT opportunities, supports a more resilient and balanced earnings profile over time. Against this backdrop, he sees the current pressure on the stock as an opportunity for investors ahead of further clarity at the upcoming investor event, justifying a Buy rating and a $150 price target.

According to TipRanks, Buchalter is a 5-star analyst with an average return of 19.2% and a 63.94% success rate. Buchalter covers the Technology sector, focusing on stocks such as Texas Instruments, Advanced Micro Devices, and Qualcomm.

In another report released on February 3, TipRanks – Google also reiterated a Buy rating on the stock with a $176.00 price target.