Qualcomm Analyst Reduces Price Target On Lack Of Conviction About Near-Term Fundamentals — Stock Slips Premarket After Q4 Print

• Baird analyst Tristan Gerra said he expects Qualcomm to be a transformed company by the calendar year 2028.
• The analyst believes that by that timeframe, the stock deserves a higher multiple.
• On Stocktwits, retail traders remained guarded following Q4 results.

Wireless chipmaker Qualcomm, Inc.’s (QCOM) stock fell nearly 3% in Thursday’s early premarket session following its fourth-quarter results. An analyst reduced the price target for the stock, citing near-term headwinds.

Qualcomm stock has underperformed the broader tech sector and the semiconductor industry, having risen 19% for the year.

Qualcomm - A Long-Term Story?

Baird analyst Tristan Gerra said he expects Qualcomm to be a transformed company by the calendar year 2028, warranting a higher multiple. By then, the analyst expects handset revenue to be decisively below 50% of total revenue, and automotive and IoT are expected to grow at a double-digit year-over-year (YoY) rate.

The analyst noted that the management continues to expect its market share at Apple to decline to 20% by September 2026. This, combined with a shift from a 100% to a 75% share at Samsung in the March Quarter, prompted the analyst to forecast flat to lower annual revenue through fiscal year 2027. This could be augmented by revenue related to artificial intelligence (AI).

Gerra also noted that incremental, AI-related opex will likely increase by $15 million to $20 million per quarter, starting in the March quarter. That said, he remained skeptical of the company’s AI opportunity at hyperscalers.

While maintaining an ‘Outperform’ rating, the analyst reduced the price target for the stock to $200 from $216.

Qualcomm Q4 Earnings, Outlook

The fourth-quarter adjusted earnings per share (EPS) and revenue came in at $3 and $11.3 billion, respectively, exceeding the Fiscal.ai-compiled consensus estimates of $2.87 and $10.76 billion.

Qualcomm’s first-quarter guidance calls for adjusted EPS of $3.30-$3.50 and revenue of $11.8 billion-$12.6 billion. Analysts, on average, estimate $3.30 and $11.57 billion, respectively.

What Retail Feels About QCOM Stock After Q4 Print

Following the quarterly print, sentiment toward Qualcomm stock was ‘neutral’ as of early Thursday, although improving from ‘bearish’ a day ago. The message volume improved to ‘extremely high’ levels.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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