RBC Capital Initiates Coverage on Qualcomm at Sector Perform

RBC Capital analyst Srini Pajjuri initiates coverage on Qualcomm (NASDAQ: QCOM) with a Sector Perform rating and a price target of $180.00.

“QCOM underperformed the SOX index over the past year due to sluggish smartphone growth, modem in-sourcing at Apple, and a lack of a compelling data center AI narrative.

We expect muted revenue growth for the next 2 years as share shifts at Apple (and Samsung) largely offset solid growth in Auto, XR, and IoT markets.

While we are encouraged by the recent AI accelerator product announcement, meaningful revenue contribution could take time. At 14x P/E, valuation appears reasonable and cash returns are solid.

We initiate at Sector Perform as we await evidence of meaningful Data Center progress.”

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