Qualcomm Stock Analysis: AI Potential Beyond Handsets

**Implied Volatility / Movement:**

Qualcomm (NASDAQ: QCOM) is presenting an AI opportunity that investors may be underestimating, according to analysis from 24/7 Wall St. Despite recent stock declines, the firm maintains a buy recommendation with a high confidence level, citing Qualcomm's diversification beyond its traditional handset market into areas like automotive and data centers.

The company's automotive revenue has seen a surge, and CEO Cristiano Amon has set an ambitious target of $40 billion in non-handset revenue by fiscal year 2029. This diversification strategy is seen as a key driver for future growth, with projected acceleration in growth rates for fiscal years 2026 and 2027. Data center projections alone indicate substantial scaling from $5 billion in fiscal 2027 to $15 billion by fiscal 2029, supported by custom silicon wins with hyperscale customers.

While $QCOM+WL shares have experienced a downturn over the past week, month, and year-to-date, with a recent fiscal Q3 revenue beat but a slight miss on non-GAAP EPS, the underlying business mix shift is noted. Handset revenue saw a 20% year-over-year decrease, but automotive revenue climbed 61% to $1.588 billion. Analysts believe this strategic pivot, coupled with planned price increases to restore gross margins, positions Qualcomm for a significant recovery and upside potential, even with potential headwinds from Apple's product revenue and rising costs.

In comparison to peers like Broadcom and Marvell, Qualcomm's current valuation metrics for data center investments are considered more attractive.