Qualcomm Secures Apple Deal and Growth in Auto Despite Near-Term Headwinds

Qualcomm signed a new 3-year agreement with Apple to supply 5G modem chips, reducing the risk of losing its largest customer.
Qualcomm reported disappointing Q3 results with declining revenues in handsets and IoT due to economic weakness, but earnings beat estimates.
Qualcomm is making strong progress in automotive with new deals with BMW and Mercedes and over $35B in design wins, presenting massive growth potential.
While near-term headwinds persist, Qualcomm remains fundamentally strong with leadership in key markets like handsets, IoT and automotive.
With the reduced risk profile and growth outlook, Qualcomm stock appears undervalued trading at 13.7x forward P/E, 25% below historical average.

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Relevant topic timeline:

9/5/2023

Qualcomm focuses on AI and auto as Nvidia takes over as world’s biggest fabless chip company

Qualcomm, known for its tech inside smartphones, is expanding into generative AI with new in-vehicle capabilities and partnerships, aiming to run AI models locally rather than relying on the cloud, positioning itself as a key player in the AI space; uncertainty about its relationship with Apple and the industrywide downturn in smartphone shipments have driven Qualcomm's push to diversify its business.

9/5/2023

Qualcomm to supply BMW and Mercedes with chips for displays, voice features

Qualcomm will supply chips for in-car infotainment systems to luxury automakers Mercedes and BMW, as the U.S. semiconductor company expands its presence in the automotive sector.

9/6/2023

Kuo: Apple-Designed 5G Modem for iPhones to Debut in 2025

Apple plans to use its own modem chip for iPhones starting in 2025, reducing its reliance on Qualcomm, but it's unclear if there will be any consumer benefits over Qualcomm modems.

9/11/2023

Apple Extends Deal With Qualcomm for iPhone 5G Modems Through 2026

Apple's iPhone sales in China surpassed the United States in the second quarter of 2023, becoming the largest market for iPhone shipments, while Qualcomm announced that it will continue to supply Apple with 5G modems through 2026.

9/11/2023

Qualcomm to Supply 5G iPhone Chips Through 2026, Boosting Stock Price

Qualcomm has announced that it will supply Apple with 5G chips for its iPhone launches over the next three years, leading to a jump in Qualcomm's stock price.

9/20/2023

Qualcomm Enters Wi-Fi Router Market with Faster Wi-Fi 7 Devices for Carriers

Qualcomm is entering the Wi-Fi router market, with Charter Communications and UK's EE as its first customers, providing gateways that transform fiber-optic lines into Wi-Fi signals and prioritize traffic from specific apps and services for faster speeds.

9/28/2023

Micron Stock Drops on Margin Outlook, But Analysts Still Recommend Buying the Dip

Despite a drop in Micron Technology stock and a surprising margin outlook, analysts suggest that it is a good time to buy.

10/8/2023

Apple and Qualcomm Reach Modem Supply Agreement, Delaying Apple's Own Modem Until 2027

Qualcomm's agreement to continue selling modems to Apple puts a pause on the doom narrative surrounding Qualcomm's largest customer loss, and it suggests that Apple may not have its own modem until the 2027 iPhone at the earliest.

10/10/2023

Qualcomm Unveils New Snapdragon Chips for PCs With Apple-Like Performance

Qualcomm plans to release its next-generation Snapdragon X chips for PCs in 2024, which promise "next-level performance" and features such as on-device AI processing and 5G connectivity, while also facing a lawsuit from Arm for violating licensing agreements.