The AI Opportunity Qualcomm Investors May Be Underestimating

The AI opportunity for Qualcomm investors may be underestimated, according to a report. While Wall Street views QCOM as a handset stock, automotive revenue has surged 61% and CEO Cristiano Amon has set a goal of $40 billion in non-handset revenue by 2029. QCOM's forward P/E of 16 and EV/EBITDA of 13 make it a more attractive data center bet compared to AVGO and MRVL, which carry AI premiums.

The analyst who named NVIDIA as his top AI stock in 2010 has named Qualcomm as one of his top 10 AI stocks, but it was not included in the list. The 24/7 Wall St. price target for Qualcomm is $226.05, implying a 41.14% upside from the current $160.61 quote. The report suggests that the growth in automotive revenue is the key driver of the company's value, with automotive revenue expected to reach $40 billion by 2029.

The report projects that data center revenue will grow from $5 billion in fiscal 2027 to $15 billion in fiscal 2029, driven by two hyperscaler custom silicon wins already in production. The bear case for QCOM still suggests a 19.29% gain from current levels.