Qualcomm Inc’s (NASDAQ: QCOM) commitment to diversify its revenue beyond smartphone demand will help unlock significant upside in its stock price moving forward, says Samik Chatterjee, a senior JPM analyst.
Qualcomm reported better-than-expected earnings for its fiscal second quarter last night but issued cautious guidance for the future.
Still, Chatterjee continues to see QCOM shares as an attractive pick for the longer term. Including the post-earnings decline, the chipmaker is down nearly 20% versus its year-to-date high.
Qualcomm’s IoT and autos revenues are booming
In his research note, Chatterjee agreed there were some near-term concerns surrounding QCOM shares in 2025.
But the management’s commitment to boosting revenue from segments other than smartphones, like internet of things and autos, he added, could lead to “re-rating”, making Qualcomm stock attractive as long-term holding.
The chipmaker saw a 27% year-on-year increase in IoT revenue in its recently concluded quarter and an even bigger 59% growth in the automotive business.
In the earnings release, chief executive Cristiano Amon reiterated that “our top priorities remain executing our diversification strategy and continuing to invest in areas that drive long-term value.”
Note that QCOM is a dividend stock that currently yields 2.40% as well, which makes it even more exciting to own at current levels.
Nuvia acquisition to drive upside in QCOM shares
Qualcomm now sees its adjusted earnings on a per-share basis to print at $2.70 in the current quarter on $10.3 billion in revenue.
Analysts, in comparison, were at $2.67 per share but a higher $10.35 billion in sales for Q3.
Still, Qualcomm stock could drive “incremental interest” on the back of its Nuvia acquisition, according to the JPMorgan analyst.
In 2021, the multinational based out of San Diego, California spent $1.4 billion to takeover the chip design startup and strengthen its hold on the data centre market.
Finally, QCOM shares stand to benefit from AI tailwinds as well in 2025.
Is Qualcomm stock strongly positioned to weather tariffs?
On the earnings call last night, Qualcomm also confirmed that it doesn’t, at the moment, expect higher tariffs under the Trump administration to weigh meaningfully on its financials moving forward.
However, tariffs had not resulted in a significant pull forward of demand either, it added.
“One thing to remember is that we have a very diversified global supply chain. As we navigate these times, this is a company that is not inexperienced in dealing with uncertainty,” CEO Amon added on the earnings call.
Investors should also note that JPM is not alone in keeping bullish on Qualcomm stock. Consensus rating on QCOM shares also currently sits at “overweight”.
Analysts have an average price target of about $188 on the chipmaker, indicating more than 30% upside from current levels.
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