Qualcomm (QCOM) Earnings Preview: Why Analysts See a Buy After the Stock Dip

Qualcomm is walking into earnings with a lot of baggage — a 31% share price decline, lingering worries about losing Apple's modem business, and general skepticism about its next act. But one analyst just flipped from cautious to bullish, and the case is worth understanding whether you own the stock or not.

What Happened

Qualcomm has been synonymous with smartphone chips for years, but that business is under pressure as Apple builds its own modems in-house. In response, Qualcomm has been pushing hard into new territory: data centers and automotive chips. The company's stated goal is ambitious — double its non-handset revenue to $40 billion by fiscal 2029. A recent upgrade from a Seeking Alpha contributor argues the market hasn't priced in how much progress Qualcomm is actually making on that front, especially with growing traction among hyperscalers (the big cloud companies like Amazon, Microsoft, and Google building out AI infrastructure).

Why the Upgrade Now

The timing matters. After a steep pullback, Qualcomm's valuation looks compelling relative to its growth story. The analyst pegs intrinsic value around $220 per share, suggesting the stock trades at roughly a 23% discount to what it's actually worth. That's the kind of gap value-focused investors love to find — a company with real diversification momentum getting punished by sentiment tied to an old narrative (the Apple modem loss) rather than where the business is actually headed.

Automotive is the other leg of this story. Qualcomm's chips are increasingly showing up in connected and autonomous vehicle systems, a segment that's been quietly accelerating while headlines stay fixated on smartphones and AI data centers.

The Risk Side

No upgrade is a sure thing. The biggest risk flagged here is dependency on hyperscaler demand — if the AI infrastructure buildout slows or cloud giants pull back on custom silicon partnerships, Qualcomm's data center pivot loses steam fast. There's also execution risk in hitting that $40 billion non-handset target on schedule. Diversification stories sound great in investor decks; delivering them on a five-year runway is harder.

What Reader Should Know

Earnings season is when narratives like this get tested. If Qualcomm's upcoming report shows real traction in data center and automotive revenue, that $220 intrinsic value estimate starts looking a lot more credible to the broader market — and shares could re-rate quickly. If growth in those segments disappoints, expect the stock to stay stuck in the doghouse a while longer.

Either way, this is a name worth watching heading into its next print, especially for anyone tracking the broader AI infrastructure and semiconductor diversification trend playing out across the chip sector right now.