Seaport Global starts Qualcomm stock with Neutral rating

Published 09/05/2025, 13:30
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Friday, Seaport Global Securities initiated coverage on Qualcomm (NASDAQ:QCOM) shares, assigning a Neutral rating. The research firm’s analyst, Jay Goldberg, noted that despite Qualcomm’s position as a leading semiconductor supplier for mobile handsets and strong financial metrics including a P/E ratio of 14.79 and revenue growth of 16.15% over the last twelve months, the company faces challenges due to the maturation of the smartphone market and increasing competition. According to InvestingPro analysis, Qualcomm maintains good overall financial health with strong profitability indicators.

Goldberg highlighted that the growth prospects in the smartphone sector are minimal, and Qualcomm is experiencing a decline in market share as competitors like Apple (NASDAQ:AAPL) and Huawei develop their own chips. Apple, in particular, is swiftly moving towards using its in-house modem technology.

Despite these challenges, Qualcomm is recognized for its substantial profits from its primary operations. The company is undertaking significant efforts to diversify its business beyond mobile phones, a strategy that is expected to require several years to materialize fully.

The analyst pointed out that while there is no immediate threat that would cause a sharp decline in Qualcomm’s stock, the current market conditions for the mobile and semiconductor industries make it difficult to be enthusiastic about the company’s shares in the short term.

In conclusion, Seaport Global Securities acknowledges Qualcomm’s continued relevance in the mobile and semiconductor sectors. However, given the company’s current market share struggles and the time needed to successfully diversify its business, the firm maintains a cautious stance with a Neutral rating on the stock.

In other recent news, Qualcomm Incorporated reported its second-quarter fiscal 2025 results, exceeding analyst expectations with earnings per share (EPS) of $2.85, compared to the forecasted $2.80. The company’s revenues also surpassed predictions, reaching $10.84 billion against the anticipated $10.55 billion. Despite this positive financial performance, Qualcomm’s stock experienced a 5.6% decline in after-hours trading. The company continues to focus on expanding its presence in the automotive and IoT sectors, which have shown significant revenue growth. Qualcomm launched new products, including the X85 modem platform with AI features, aiming for substantial revenue targets in the PC and automotive sectors by fiscal year 2029. The company has set a revenue forecast range of $9.9 billion to $10.7 billion for the third quarter of 2025, with a non-GAAP EPS estimate between $2.60 and $2.80. Qualcomm remains optimistic about a 10% growth in handset revenue. Additionally, Qualcomm returned $2.7 billion to stockholders, including $938 million in dividends and $1.7 billion in stock repurchases.

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