QCOM Stock On Track To Open At Highest Levels In 3 Months, But Wall Street Is Cautious Ahead Of Q2 Earnings

• Analysts at Barclays reinstated their coverage of Qualcomm with an ‘Underweight’ rating and a $130 price target, which implies a downside of nearly 13% from Friday’s closing price.
• The firm stated that Qualcomm’s offerings in the automobile and Internet of Things segments will not be enough to offset the downside that the smartphone segment is facing due to memory pricing headwinds.
• Barclays also noted that Qualcomm’s prowess in the data center segment is yet to be proven, while adding that the deployment of AI on local devices is still several years away.

Shares of Qualcomm Inc. (QCOM) rose more than 12% in Monday’s pre-market trade, with the stock on track to open at its highest levels in more than three months after being on a downward trajectory for most of this year so far.

Qualcomm shares closed more than 11% higher on Friday and look set to repeat that performance in Monday’s opening trade, hovering around $165 a share. Qualcomm’s shares were last seen at these levels in January this year.

However, while Main Street is turning optimistic about Qualcomm, Wall Street is not sold on the bullish outlook yet ahead of the company’s second-quarter (Q2) earnings due later this week.

According to a report, OpenAI is said to be in talks with Qualcomm to develop smartphone processors for the AI startup.

Why Are Analysts Not Sold On Qualcomm?

According to TheFly, analysts at Barclays reinstated coverage of Qualcomm with an ‘Underweight’ rating and a $130 price target, implying a downside of nearly 13% from Friday’s closing price.

The firm stated that Qualcomm’s offerings in the automobile and Internet of Things segments will not be enough to offset the downside that the smartphone segment is facing due to memory pricing headwinds.

Barclays also noted that Qualcomm’s prowess in the data center segment is yet to be proven, while adding that the deployment of AI on local devices is still several years away.

UBS analysts lowered their price target for Qualcomm to $150 from $160 while keeping a ‘Neutral’ rating on the stock. The firm stated Qualcomm’s underlying fundamentals and estimates continue to deteriorate, and rising memory prices are emerging as a key pressure point for the company.

Earlier this month, BNP Paribas analyst David O’Connor downgraded Qualcomm to ‘Neutral’ from ‘Outperform’, while lowering the price target by 33% to $120 from $180. O’Connor stated that he sees no end in sight for the company’s smartphone woes and added that this could translate into demand destruction. He sees no relief for Qualcomm in the short to medium term.

According to Koyfin data, the average 12-month price target for QCOM stock is $150, implying a 1% upside from current levels. Of the 36 analysts covering the stock, eight recommend ‘Buy’, 24 recommend ‘Hold’, while four have a ‘Sell’ or ‘Strong Sell’ rating.

Wall Street’s Expectations From Qualcomm’s Q2 Earnings

According to data from Fiscal.ai, Qualcomm is expected to report earnings per share (EPS) of $2.58 on revenue of $10.56 billion.

The company reported EPS of $2.85 on revenue of $10.84 billion during the same period a year ago.

Qualcomm is scheduled to report its Q2 earnings after the bell on Wednesday, April 29.

How Did Retail Traders React?

Retail sentiment on Stocktwits around Qualcomm trended in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels at the time of writing.

One bullish user thinks Qualcomm is the only chip stock that is not yet at its all-time high, but needs to reach it.

QCOM stock is down 13% year-to-date and up 1% over the past 12 months. The S&P 500 ETF (SPY) is up 31% over the past 12 months, while the Invesco QQQ Trust ETF (QQQ) is up 42%.

The Vanguard S&P 500 ETF (VOO) and the iShares Core S&P 500 ETF (IVV) are up 31% during this period.

Also See: MU Stock Rises Above $500 For The First Time Ever Following A 76% Rally This Year — Retail Points To Huge Agentic AI Opportunity

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