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Several Wall Street analysts reiterated Qualcomm Inc (NASDAQ:QCOM) after the company’s 2024 investor day.
- Cantor Fitzgerald analyst CJ Muse reiterated Qualcomm with a Neutral and a $160 price target.
- KeyBanc analyst John Vinh maintained Sector Weight on Qualcomm with a price target of $165.
- Rosenblatt analyst Kevin Cassidy reiterated a Buy on Qualcomm with a price target of $250.
Cantor Fitzgerald: At the IoT and Automotive Diversification Update Investor Day, Qualcomm outlined its plans to shift revenue reliance from handsets to higher-growth segments like Automotive, IoT, PCs, XR/AR, and Industrial applications. Muse noted that Qualcomm’s Automotive segment is a standout performer, with the company projecting over $8 billion in revenue by fiscal 2029 at a 22% compound annual growth rate (CAGR).
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More than 80% of this forecasted revenue is supported by backlog, providing confidence in this segment’s outlook. However, IoT’s projected jump from $5.4 billion in fiscal 2024 to $14 billion in fiscal 2029 raised skepticism, mainly the PC segment target of $4 billion, which assumes a 10% market share at an average selling price of $175. Muse sees significant competitive pressure from x86-based systems, making the target aggressive.
The XR/AR revenue projection of $2 billion by fiscal 2029 appears more feasible, given partnerships with significant players like Meta, Alphabet, Google and Samsung. IDC’s forecast of a 35% CAGR for the XR market are a supporting factor. Despite the optimistic outlook for XR, overall assumptions for IoT, PC, and Industrial/Other revenue leave room for potential overestimation.
Qualcomm management maintained its long-term operating expense target at 21%-23% of revenue. The company anticipates fiscal 2029 EPS reaching $14.12, representing a 7% 5-year CAGR from $10.28 in fiscal 2024. While diversification efforts are poised to make IoT and Automotive account for 50% of total QCT revenues by fiscal 2029, Muse expressed concerns ...
