Loop Capital Upgrades Qualcomm to Buy

Loop Capital analyst Gary Mobley upgraded Qualcomm (NASDAQ: QCOM) from Hold to Buy, PT $185.00.

“There are many reasons why QCOM’s shares have underperformed the chip sector on a YTD, 1-yr-, 3-yr & 5-yr basis. Most obvious, the company is not a data center AI beneficiary, at least not yet.

YTD, the share price underperformance has been fueled by a perfect storm of circumstances.

However, memory chips won’t remain in short supply forever, and accordingly, the smartphone market should recover/normalize from the initial shock.

Additionally, by this time next year, QCOM’s sales to Samsung will comp evenly at 75% share (vs. the step-down from 100% share as is the case this yr).

Third, by this time next yr, QCOM’s chip shipments to Apple will be on pace to be <10% of QCOM’s total revenue (NOTE: excludes QTL patent licenses collected from AAPL).

Last, by this time next year, investors will feel more confident in the scenario whereby QCOM’s FY29 Automotive & IoT sales approach or eclipse Handset sales for the 1st time, signaling a milestone in QCOM’s diversification path.

With this sentiment- shift scenario in mind, and considering the ~20% sell-off in QCOM shares YTD, we are upping our rating from “Hold” to “Buy.””

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