Multiple growth engines, not just phones
Qualcomm beat on revenue and EPS, with strength across Handsets, IoT and Automotive.
Qualcomm: Underappreciated Engine: Powering Phones, PCs, Cars, and More
With nine quarterly beat-and-raises and a lead in low-power compute, Qualcomm is becoming the backbone of edge AI. It’s also expanding into PCs, data-centre inference, automation and smart glasses the billions of devices that will run AI natively.
Updated: Nov 13, 2025
Technology
microuk
Bull & Bear Case
An overview of the main reasons to invest and the key risks involved.
Bull Case
Data‑centre and PC upside the market isn’t pricing
Qualcomm launched AI200/AI250 data‑centre solutions and named HUMAIN as the first customer
Better experience wins buyers
Devices with Snapdragon typically feel faster and last longer on battery, and can run more “AI on your device”
Bear Case
Heavy China exposure
A large share of sales depends on Chinese OEMs and local regulations.
Auto pipeline takes years and faces fierce rivals
Car “design wins” typically need 5–7 years to show up as shipping revenue.
Licensing and supplier dependencies
Qualcomm relies on long‑term technology licenses and key manufacturing partners.
Executive Summary
Qualcomm (NASDAQ: QCOM) is a global leader in wireless technology, best known for its Snapdragon chipsets that power premium smartphones, PCs, automotive systems, IoT devices, XR headsets, and wearables. The company designs and licenses advanced semiconductor solutions, wireless standards, and AI platforms, enabling high‑performance, low‑power computing across mobile and connected devices. Qualcomm’s technology underpins 5G connectivity, on‑device AI processing, and autonomous driving systems through its Snapdragon Ride and AI Engine platforms, serving major OEMs worldwide.
Qualcomm sits at the intersection of two secular megatrends, on‑device AI and autonomous systems, positioning it for sustained multi‑sector growth. With expanding automotive and IoT revenues, robust free cash flow, and a $15 billion buyback plan for FY2025, QCOM offers a compelling mix of growth potential and shareholder returns. Trading at just ~12–13x forward earnings, well below peers, the stock presents an attractive entry point as upcoming product launches and strategic partnerships drive long‑term value creation.
Investment Thesis
Overview of buy and sell case of the business.
Why Invest?
Key pieces of information about the business that you need to know about.
Multiple growth engines, not just phones
Qualcomm beat on revenue and EPS, with strength across Handsets, IoT and Automotive. Auto just crossed a $1B quarter and management reiterated the FY29 auto+IoT targets, showing the expansion is real, not just narrative.
Data‑centre and PC upside the market isn’t pricing
Qualcomm launched AI200/AI250 data‑centre solutions and named HUMAIN as the first customer, targeting 200 MW in Saudi Arabia from 2026, a concrete ramp that can add a new revenue stream earlier than many models assume. PC momentum continues with new X2 Elite chips outperforming rivals (Intel and AMD) on speed and power efficiency and ~150 design wins in the pipeline.
Better experience wins buyers
Devices with Snapdragon typically feel faster and last longer on battery, and can run more “AI on your device” tasks without the internet. It’s snappier, saves power, and keeps more data private. The new Snapdragon 8 Elite Gen 5 set fresh benchmarks, and X2 Elite brought the world’s fastest laptop NPU plus enterprise features like Guardian remote management.
Catalysts
The key events that could drive investment opportunities and shift markets.
Data‑centre proof points: Additional details or named customer updates ahead of the early‑2026 investor update; progress on HUMAIN’s 200 MW Saudi deployment plan would validate an earlier revenue path than models assume.
PC momentum visible: Reviews and shipment share for Snapdragon X2 Elite laptops, plus enterprise wins leveraging Guardian remote management; confirmation of ~150 design wins converting to shelf.
Buybacks & dividends: Management maintained an aggressive capital return cadence in recent quarters, signaling confidence in multi‑engine growth visibility and cash conversion through product launch season. With a busier roadmap and diversified demand, repurchases can offset dilution while underpinning per‑share earnings momentum.
Auto programmes moving to shipment: BMW iX3 rollout of Snapdragon Ride Pilot and additional OEMs adopting Qualcomm’s cockpit and ADAS stacks, turning portions of the $45B pipeline into revenue.
Data‑centre revenue visibility: Management signalling a FY2027 first material revenue year; any confirmed hyperscaler or regional cloud wins would derisk the ramp.
Hybrid AI shift: More everyday tasks run locally on devices, rewarding Qualcomm’s focus on speed, privacy and battery life across phones, PCs and XR; supports multi‑engine growth beyond handsets.
Automotive scale and software attach: Expansion of Ride Pilot features and licensing across more brands and regions, improving content per vehicle and software mix through decade end.
Key Risks
Key pieces of information about the business risks that you need to know about.
Heavy China exposure
A large share of sales depends on Chinese OEMs and local regulations. Escalating trade or antitrust actions could hit demand, pricing, or licensing terms quickly. Management continues to highlight geopolitical sensitivity as an ongoing risk factor
Auto pipeline takes years and faces fierce rivals
Car “design wins” typically need 5–7 years to show up as shipping revenue, leaving room for delays or platform switches. NVIDIA and Mobileye are targeting the same cockpits and driver‑assist features, which could compress margins or slow Qualcomm’s share gains if programmes slip
Licensing and supplier dependencies
Qualcomm relies on long‑term technology licenses and key manufacturing partners. Renewals and next‑gen standards cycles (e.g., Arm), plus security or regulatory events, can change costs and access. While management won a major legal dispute and reiterated confidence, these dependencies remain material
Follow the Experts
Quickly navigate key insights from industry experts and leverage their knowledge and market intelligence.
Expert Insights
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..Under the surface, the story is about momentum in diversification. Automotive and IoT reached record highs, with the Snapdragon Digital Chassis and AI-driven IoT platforms driving adoption. Qualcomm’s entrance into data center AI accelerators adds a new vector for long-term growth....
Expert Insights
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" At the @Oppenheimer Tech Conference, @Qualcomm's Nakul Duggal says $QCOM will commercialize it's first automotive driving stack with @BMW, with more details coming in September at IAA Mobility in Munich. Big milestone for Snapdragon Ride as Qualcomm moves deeper into ADAS."
Expert Insights
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"Qualcomm CEO Cristiano Amon with an important quote for AI investors: “As inference games scale, cloud service providers are building dedicated inferencing clusters focused not only on performance, but also efficiency, specifically tokens per dollar and tokens per watt.”$QCOM"
Expert Insights
Expert Insights
reddit
Qualcomm been a frustratingly underperforming semicon company for many years despite making the best chips in the smartphone, automotive space and its telecom licensing business. Apple modem overhang continues to weigh down the stock. Ray-ban Meta glass is powered by Qualcomm, but that's not enough revenues. Microsoft surface was meant to be a breakthrough for Qualcomm into the laptop segment, but that didn't turn out to be one. Is this stock a value trap? If not, what's the trigger in the near term.
Investor Materials
Access the most recent investor updates published by the company.
Key Documents
Fourth Quarter and Fiscal 2025 Earnings
ArticleQ3 2025 presentation
PDF2024 Annual report
PDFExternal Insights
A curated collection of third-party content relevant to the company and sector to help inform your investment decision.
Qualcomm's Potential
Qualcomm's premium smartphone chip reliance, Apple modem loss overshadow upbeat forecast
ArticleIndustry Insights
Alphawave agrees £1.8bn takeover by America’s Qualcomm
ArticleThe deal is worth less than half the value at which Toronto-headquartered Alphawave floated when it listed in London just over four years ago.
Team
Meet the experienced professionals leading our organization
Cristiano Amon
Akash Palkhiwala
Dr Baaziz Achour
Alex Rogers
What the Pro's Are Asking
Here are the questions that professional investors are asking before making an investment decision.
Is Qualcomm’s on-device AI moat sustainable in the face of Nvidia and Apple?
There’s real staying power here. Qualcomm’s strategy isn’t to chase Nvidia’s lead in data-center training, but to dominate distributed “hybrid AI”, the processing of models directly on low-power devices. Snapdragon’s current architecture (integrating NPUs, advanced GPUs/CPUs, and sensing hubs) lets even large language models run efficiently on smartphones, PCs, and cars. Recent tests saw Qualcomm’s Cloud AI 100 chip outperform even Nvidia’s H100 in data center inference tasks. Apple may set the pace for on-device AI in its own ecosystem, but Qualcomm’s advantage lies in cross-platform ubiquity, relationships with Android flagships, Meta, automotive OEMs, and IoT. Nvidia and Apple will fight hard in their respective niches, but Qualcomm’s focus on performance-per-watt, privacy, and integration gives it a differentiated moat in the exploding edge inference market that industry analysts expect to outgrow data center processing by volume this cycle.
How much risk does the loss of Apple modem contracts pose to future profits?
The risk is material, but being actively mitigated. Qualcomm’s modem revenue from Apple, estimated at 20% of total sales, is forecast to fall sharply as Apple rolls out its in-house silicon, starting with this year’s iPhone 16e. The shift prompted a 7% share dip and is expected to shave billions off annual revenue by 2027. Qualcomm has ramped up non-Apple QCT revenue sharply, up over 15% expanding ASPs in Android flagships and accelerating automotive and IoT sales. Q2 results show strong diversification with 59% YoY growth in automotive and 27% in IoT. The transition hurts margins, especially with handset volumes soft, but Qualcomm’s pivot means its reliance on Apple is shrinking, investors should watch the execution of automotive and IoT ramp for successful offset.
Can Qualcomm outgrow the overall semiconductor industry, given tepid core handset growth?
It’s becoming possible as the mix shifts from mobile to auto/IoT and AI edge. While PC and mobile markets remain muted, global chip sales are up on generative AI and cloud build-outs; consensus expects the industry (~$705b 2025). Qualcomm’s diversified revenue engine is visible in Q3: $10.4b revenue (+10% YoY), $9b from QCT (+11%), and non-handset segments (automotive $984m, IoT $1.68b) growing >20%. Its auto and IoT segments now target $22b by 2029, with 64% of revenue still from mobile, but falling every quarter. Realistically, Qualcomm won’t outgrow data-center-centric players, but its focused strategy places it among industry leaders for growth in edge AI hardware and automotive connectivity, a margin-rich, sustainable tangent that’s distinct from volume-chasing consumer chips.
Are buybacks maximizing long-term value, or simply patching valuation?
For now, buybacks are value-accretive, Qualcomm bought back $3.8b YTD and targets $15b for FY2025, equivalent to 100% FCF, with record margins (56% gross, ~42% ROE) underpinning their discipline and efficiency. The company’s forward P/E of 12-13x is well below sector averages (industry ~29x), meaning buybacks boost per-share results when shares are arguably undervalued according to analysts ($225–243 price targets). If growth in auto and IoT delivers as forecast, these buybacks set a higher compounding base. If handset or China risks materialize more severely, however, critics may view the pace as short-term support versus sustained compounding. The consensus: Buybacks make sense at current valuations and with disciplined capital allocation, but continued execution in new verticals is essential for true long-term value.
How exposed is Qualcomm to China supply risks and global regulatory constraints?
China remains Qualcomm’s critical dependency and risk. Roughly 45% of revenue derives from Chinese OEMs, especially Android flagships, and licensing deals with Honor and Transsion. Renewed U.S. trade tensions and potential tariffs, rumored 25% rates on chips, could hit both manufacturing costs and sales. Recent quarters saw share price drops on headline risks, and non-handset sales are ramping precisely to reduce dependence. Cybersecurity and regulation also loom large; as of August 2025, major vulnerabilities flagged by CISA and Google have hit some popular Qualcomm Android chipsets, underscoring operational security risk. The long-term concern is that Chinese OEMs may accelerate the adoption of homegrown chip platforms if the trade war intensifies, eroding Qualcomm’s China share. Regulatory, geopolitical, and supply chain headwinds are the most challenging risks facing the business as it scales new verticals.
Any questions?