Undervalued and Unfazed: Why Qualcomm Could Climb to $200

The company hasn’t had an earnings miss since 2023, its fundamentals remain strong and its on-device AI will scale quickly

• The market has been undervaluing Qualcomm since the Liberation Day sell-off.
• But the company hasn’t had an earnings miss since 2023, and its fundamentals remain incredibly strong.
• Plus, it will benefit because on-device AI will likely scale faster than data center AI.
• So, there’s room to climb to $200 and beyond by the end of this year.

While other chip stocks are making international noise, Qualcomm (QCOM) continues to fly under the radar. The stock, which was trading at $230 less than a year ago, slid to lows of $120 amid the Liberation Day volatility and sell-off. While the rest of the market has rallied back to near all-time highs, the company’s recovery has been slow and quiet, and I do not believe that is justified. 

Qualcomm has strong fundamentals, hasn’t missed earnings expectations since 2023 and works intimately with Google in its AI development process. I believe this to be only the beginning of its recovery. 

Qualcomm’s quiet dominance

Qualcomm has been a dominant force in mobile chipsets for some time, with its Snapdragon platform powering most Android flagship smartphones. Its core business revolves around wireless communications IP, primarily in the form of 5G modem technology, where it holds a number of key patents. 

This involvement with 5G technology is a massive cash cow for Qualcomm; it takes royalties on wireless standards. Because of that, it makes money even when its competitors succeed – if something connects wirelessly, there’s a good chance Qualcomm is getting paid. 

The company’s tech extends beyond just smartphones to include cars, computers, and a number of other more niche devices and applications. These revenue streams have led to consistent profitability and free cash flow, enabling frequent buybacks and a healthy dividend to provide value to shareholders. It has also weathered the cyclical demand for semiconductors because of its consistent income from 5G royalties. 

Waiting for its moment

Qualcomm has been slower than it’s contemporaries to recover from the Liberation Day sell-off, but that tardiness, in my opinion, is caused primarily by sentiment and does not warrant any alarm bells. The market’s obsession with data center-centric AI plays has left the company out of the spotlight; it’s not building GPUs for ChatGPT, so it’s “not a pure AI play.” It instead focuses on on-device AI, which has not captured the same hype just yet.

The market also undervalues Qualcomm’s high-margin data licensing segment, which is often seen as defensive instead of growth-oriented, despite being one of the main drivers of its growth in recent quarters. 

The company’s diversification is also highly underrated, even though it has expanded into the automotive sector, IoT and AI. These changes are all in motion but are not making meaningful contributions to top-line growth just yet – though I believe they will in the near future. Investors are playing wait-and-see, even though the company has secured major design wins in automotive and laptop chips. 

The Liberation Day sell-off created an artificial discount that was driven purely by broader market sentiment and not by the company’s fundamentals. Qualcomm does trade at a notably lower forward P/E than its competitors, which some view as justified caution. I choose to view it as a mispricing of future potential. 

Teaming up with Google: Qualcomm’s AI advantage

While investors are enamored with cloud AI and GPU servers, Qualcomm and Google are working together to build AI that lives on devices, including smartphones, laptops, wearables and cars. This local approach to AI allows for lower latency and greater privacy, without relying on the cloud – a key differentiator as AI applications continue to become more mainstream. 

Qualcomm’s Snapdragon chips now power Google Pixel devices in addition to the entire Android lineup, and it was announced this week that Google will be using those same Snapdragon chips in the new Android XR smart glasses. None of this is speculative – these are real, commercialized pieces of hardware and software that are being delivered right now. 

Another highly undervalued piece of information is the power efficiency of Qualcomm’s AI technology. They are the leader in AI inference on low-power hardware, which makes it ideal for mobile devices and will make the company a leader as environmental concern about AI continue to mount. 

Plus, Qualcomm’s Snapdragon X Elite Platform is being incorporated into the Windows PC market, directly challenging Intel and Apple in AI-capable laptops and PCs. In the automotive business, its Snapdragon Digital Chassis is increasingly being used for in-car infotainment and driver-assist features, many of them powered by AI. 

Undervalued but unshaken

The market may not fully appreciate it yet, but on-device AI will likely scale faster than data center AI because of lower infrastructure costs and broader end-user adoption. Qualcomm is quietly laying the groundwork for an AI feature that lives in your pocket, not just in a warehouse. 

While the company’s stock may be trading at a forward P/E ratio significantly below its peers, it has comparable (and in some cases superior) margin profiles and growth catalysts. The market continues to discount Qualcomm’s future-facing segments while over-indexing on past mobile headwinds; a classic case of lagging perception. 

Qualcomm’s current price tag reflects post-selloff dislocation, not a deterioration of fundamentals, and I view this as a rare opportunity to buy a dominant player at a discount. They’re not just chasing hype, they’re building real infrastructure for the next generation of computing, from smartphones to wearable technology to autonomous vehicles. 

In a world moving toward ubiquitous, low-power, artificially intelligent devices, Qualcomm is the quiet force enabling it all, and I think they’re primed for a great year ahead.

Gus Downing is host of the tastylive Network show Risk and Reward. @GainsByGus
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