Qualcomm Q4: Strong Growth With $15 Billion Stock Repurchase Authorization

Summary:

  • I reiterate a ‘Sell’ rating on Qualcomm, citing concerns over Apple’s potential shift to in-house 5G modems, impacting Qualcomm’s future growth.
  • Despite Qualcomm’s strong Q4 results and new $15 billion stock repurchase authorization, the risk from Apple’s modem development remains significant.
  • Qualcomm’s Snapdragon 8 Elite and AI PC market growth offer potential upside, but I believe Apple’s transition could reduce Qualcomm’s revenue by 3% from FY26 to FY28.
  • My DCF model calculates Qualcomm’s fair value at $160 per share, reflecting the potential risks and growth opportunities.

Qualcomm headquarters sign in San Diego, California, USA.

JHVEPhoto

I reiterated my ‘Sell’ rating on QUALCOMM Incorporated (NASDAQ:QCOM) in August 2024, arguing that AI PC and Handsets are unlikely to secure the company’s future. Qualcomm delivered a strong Q4 result with a new $15.0 billion stock


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