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Mixed Prospects Lead to Hold Rating for Qualcomm Amidst Growth and Uncertainties

Mixed Prospects Lead to Hold Rating for Qualcomm Amidst Growth and Uncertainties

Morgan Stanley analyst Joseph Moore maintained a Hold rating on Qualcomm (QCOMResearch Report) today and set a price target of $204.00.

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Joseph Moore has given his Hold rating due to a combination of factors affecting Qualcomm’s performance. While the company has achieved robust growth in its chipset segment, particularly with increased market share in Samsung’s Galaxy phones and strong performance with Chinese brands, these gains are somewhat dampened by seasonal factors. The March quarter is typically strong due to new Galaxy launches, but future growth may not sustain at this pace.
On the royalty front, Qualcomm faces uncertainties, especially as Huawei’s royalty agreement has expired, and the company does not expect a renewal. Although automotive and IoT segments have exceeded expectations, a potential decline in automotive growth and some weakness in the IoT industrial sub-segment suggest limited immediate upside. Additionally, while the PC segment offers long-term opportunities, its growth is anticipated to be modest in the short term. These mixed factors contribute to Moore’s Hold rating for Qualcomm.

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