Qualcomm stock rating reiterated at Outperform by Bernstein despite smartphone concerns

Published 28/07/2025, 17:10
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Investing.com - Bernstein SocGen Group has reiterated an Outperform rating on Qualcomm (NASDAQ:QCOM) with a price target of $185.00, according to a research note released Monday. The semiconductor giant, currently valued at $175 billion, has maintained strong financial metrics with InvestingPro data showing a healthy 16% revenue growth in the last twelve months.

The firm acknowledged that Qualcomm remains "heavily out of favor" due to general smartphone market weakness, tariff concerns, and near-term earnings challenges related to Apple (NASDAQ:AAPL) rolloffs. Bernstein also noted upcoming Section 232 tariffs expected in the coming weeks could impact management guidance. Despite these challenges, InvestingPro analysis shows the company maintains a strong financial health score, with liquid assets exceeding short-term obligations and moderate debt levels.

Despite these headwinds, Bernstein believes "there is value to be had under the surface," citing Qualcomm’s "objectively strong product portfolio" and an "adjacency story that looks increasingly real" that should become more apparent as Apple-related revenue diminishes over time.

The firm highlighted Qualcomm’s current valuation, noting the stock trades at a more than 40% discount to the S&P 500 and a 50% discount to the Philadelphia Semiconductor Index (SOX). Excluding Apple-related business, Bernstein estimates Qualcomm could grow earnings at double-digit rates.

While acknowledging there may be "no rush to get involved," Bernstein concluded Qualcomm appears to be "a worthwhile name to keep on your back burner" given its current valuation of approximately 15-16 times earnings excluding Apple business. For deeper insights into Qualcomm’s valuation metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which includes detailed analysis of the company’s financial health, growth prospects, and industry positioning.

In other recent news, Qualcomm has announced a quarterly cash dividend of $0.89 per share, payable on September 25, 2025, to shareholders of record as of September 4, 2025. This maintains Qualcomm’s regular quarterly payout to its investors. Meanwhile, Qualcomm is in the process of acquiring Alphawave IP Group PLC, with a recommended cash offer valuing the company at approximately $2.4 billion. The acquisition, which is expected to close in the first quarter of 2026, represents a significant premium over Alphawave’s previous share price.

In related developments, Jefferies downgraded Alphawave’s stock rating from Buy to Hold, citing Qualcomm’s offer as a reason for the adjustment, while also raising the price target to GBP1.83. Similarly, Deutsche Bank (ETR:DBKGn) has downgraded Alphawave’s stock to Hold, adjusting the price target to GBP1.83. On the other hand, Bernstein SocGen Group has reaffirmed its Outperform rating for Qualcomm, maintaining a price target of $185, following their participation in a strategic conference. Additionally, the deadline for Qualcomm’s takeover offer for Alphawave has been extended for the fourth time, with the new deadline set for Thursday.

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