Qualcomm’s Handset Revenue Decline and Tariff Concerns Prompt Sell Rating by Aaron Rakers

Analyst Aaron Rakers of Wells Fargo maintained a Sell rating on Qualcomm (QCOM – Research Report), retaining the price target of $175.00.

Aaron Rakers has given his Sell rating due to a combination of factors impacting Qualcomm’s outlook. One significant issue is the projected decline in Qualcomm’s QCT handset revenue for the second quarter of fiscal 2025, expected to drop by around 10% quarter-over-quarter. This decrease is attributed to seasonal effects and reduced shipments to Apple, which is anticipated to use its own modem in the upcoming iPhone SE 4, leading to a potential loss of business for Qualcomm.
Another factor influencing the Sell rating is the concern over Qualcomm’s reliance on tariff pull-forward, with the company downplaying the impact of near-term demand surges ahead of potential tariffs. Additionally, while there is notable growth in Qualcomm’s Snapdragon X-based PCs and new product launches, these may not sufficiently offset the challenges in the handset segment. Despite these developments, Qualcomm’s revenue and earnings estimates remain largely unchanged, and the company’s valuation remains underwhelming, leading to the maintained Underweight rating and a price target of $175.