Shares of Qualcomm Inc NASDAQ: QCOM they traded above $200 this week, continuing to rally above that key psychological level, which they took a long time to break.
Qualcomm Today
- 52 week interval
- $121.99
▼
$259.92
- Dividend Yield
- 1.98%
- The P/E ratio
- 20.30
- Target Value
- $220.45
Wall Street had penciled in the company's Investor Day as a possible trigger for the stock, with JPMorgan raising the alarm in advance and raising its price significantly in the process. To say that expectations are high would be an understatement.
The good news for investors is that the day itself didn't just meet expectations—it surpassed them, with management delivering a long-term vision that fundamentally changes how investors should think about the company.
The most eye-catching detail was the doubling of the non-handset revenue target for 2029 from $22 billion to $40 billion. For a stock long tied to its vision as a smartphone chip supplier, that's the kind of update that changes the conversation.
The Data Center Bombshell
The highlight of the investor day was the unveiling of Qualcomm's data center strategy, and the revelation that both Microsoft Corp. NASDAQ: MSFT and Meta Platforms NASDAQ: META they have already registered as early adopters.
That's not the kind of social proof you get for just talking a good game. It's the kind that gets you from delivering technology that two of the most demanding AI infrastructure buyers out there decide they have to use in their data centers.
Microsoft CEO Satya Nadella has confirmed that Qualcomm solutions will go into some of its Azure data centers. At the same time, Meta CEO Mark Zuckerberg described entering a “multi-generational partnership” with the company.
Tony Pialis, head of the company's data center business, put it another way, telling attendees that the company “has a pipeline that will blow your mind.” In other words, investors should be happy.
Why This Time Could Actually Be Different
Qualcomm has had no shortage of “this time” updates over the years, and investors have been understandably cautious about getting their hopes up. What makes this one stand out is the combination of blue-chip customers, a solid revenue target, and a coherent product roadmap that ultimately brings everything together.
In addition, the new non-handset revenue target of $40 billion by fiscal 2029 is built on three pillars rather than one, adding a layer of security. Next to the $15 billion data center business, automobiles will bring in $10 billion, while the Internet of Things (IoT) is expected to top $14 billion.
Each of those is a legitimate growing business in its own right, and combined, they could mean phones that represent only about a third of Qualcomm's chip revenue by the end of the decade. For a company that has spent almost its entire existence defined by handset exposure, that's no small change.
The Analytics Community Goes All In
Qualcomm Stock Forecast Today
12 Month Stock Price Forecast:
$218.03
15.12% changedHold on
Based on 37 Analyst Ratings
Current Price
$189.39
High Forecast
$300.00
Average prediction
$218.03
Low Prognosis
$120.00
Qualcomm Stock Forecast Details
Qualcomm Stock Forecast Today
$218.03
15.12% changedHold on
Based on 37 Analyst Ratings
| Current Price | $189.39 |
|---|---|
| High Forecast | $300.00 |
| Average prediction | $218.03 |
| Low Prognosis | $120.00 |
Qualcomm Stock Forecast Details
The update triggered exactly the kind of analyst response you'd expect in a strategic environment like this. Morgan Stanley upgraded the stock from Underweight to Equal-weight and raised its target price from $146 to $231, noting that Qualcomm's diversification “appears to be happening faster than we expected.” For a company that's been doing the exact same thing, that's a reasonable opportunity.
Then there's the fact that JPMorgan reiterated its price target of $265, while Benchmark raised its price target to $300, a new high. From where the stock is trading now, that's about 50% off target. Could this be the same Qualcomm from a few weeks ago?
Risks That Still Need to Be Watched
The answer is yes, but to be sure, none of this means that the road from here will be smooth sailing. The handset business is expected to decline next year, with Apple Inc NASDAQ: AAPL revenue is expected to disappear completely by 2029 as the iPhone maker moves everything in-house. That's a multibillion-dollar cut in handset revenue, which Qualcomm should get on its way to new targets—no small feat.
There are also increased investments required to take advantage of the data center, which may weigh on margins in the short term as new businesses scale. The acquisition of Modular, announced on the sidelines of Investor Day for $3.9 billion, is part of that build. While it should strengthen Qualcomm's AI software platform, it's another reminder that this change won't come cheap.
But for investors looking beyond the next few quarters, this update may be missed as Qualcomm finally becomes a different kind of company. After years of false dawns, a data center bomb, a double target that isn't a part of the hand, and blue-chip customer validation, all point to a business that is finally shedding the handset skin as much as the market can believe.
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