Qualcomm’s RSI Just Hit Its High of the Year—Why That’s Bullish

Key Points

• Qualcomm shares are up 40% since April and 20% since early August alone. 
• The stock's RSI momentum is its strongest in over a year, and that's a bullish thing. 
• With consistently strong fundamentals and analyst support, a breakout above $170 is on the cards.

Shares of tech giant Qualcomm Inc. NASDAQ: QCOM were trading just under $170 on Tuesday morning, their highest level since February. The stock has been on a strong run for some time, gaining nearly 40% since April and almost 20% since the start of August. For a name that has so often lagged its more well-known peers, these are unusually strong moves, and a key technical signal is confirming them.

Qualcomm’s Relative Strength Index (RSI) is now hovering around 70, its highest reading since the summer of 2024. For many stocks, that level would raise concerns of overbought conditions, but in Qualcomm’s case, it points to the most bullish momentum the stock has seen in more than a year. Coupled with a still-bullish MACD reading, this appears to be the setup investors have been waiting on for a long time.

Let’s jump in and take a closer look. 

RSI Finally Flashes Strength

For starters, a stock’s RSI is a momentum indicator that tracks whether a stock is overbought or oversold, with readings above 70 seen as a sign that a stock is verging on being overbought, and potentially due for a pullback. But context matters.

As we’ve highlighted in the past, Qualcomm has been one of the more frustrating semiconductor names to hold, weighed down by years of underperformance even as the broader chip sector surged.

That’s why this new high in RSI is so significant. It shows that buyers are firmly in control and that upward momentum is finally building in a way it hasn’t for a long time. Rather than suggesting the bulls may be nearing exhaustion, Qualcomm’s RSI spike is arguably the healthiest technical setup the stock has had in over a year.

For investors who’ve been waiting for confirmation that Qualcomm is more than just a permanent laggard, this momentum shift is about as clear as it gets.

Fundamentals Back the Move

It’s not just the technicals working in Qualcomm’s favor. The company has been consistently beating analyst expectations, including its most recent report, which showed better-than-expected earnings and revenue.

Management also issued bullish guidance, helping cement confidence in the company’s outlook and making the stock’s habit of lagging all the more frustrating. 

Remember, Qualcomm is a stock that not only set its last all-time high more than 12 months ago, but is currently trading at 2021 levels. 

However, the company's diversification push is another key reason this disappointing trend could be about to change. Growth in its automotive and Internet of Things divisions is starting to offset reliance on handsets. 

This story resonates strongly with investors who are still concerned about Apple Inc.’s NASDAQ: AAPL decision to move away from Qualcomm modems. Early numbers suggest that these diversification initiatives could become significant revenue engines in the years ahead.

Attractive Valuation

Valuation is also on the bulls’ side. At just 16x forward earnings, Qualcomm appears relatively inexpensive compared to some of its peers, which trade at far loftier multiples. For investors looking for growth at a reasonable price, it’s hard to look past Qualcomm on that alone. 

The company also offers a healthy dividend yield of 2.10%, underpinned by a strong free cash flow, which adds an element of stability many chip stocks lack.

Critical Levels in Play

This ongoing rally has brought Qualcomm back towards the top of a multi-month trading range. Shares have repeatedly failed to clear the $170–$180 zone over the past year, making it a critical band of resistance that must be overcome. There's room for a major breakout if the current momentum can push the stock decisively through it.

Recent analyst updates suggest this kind of move could well be on the cards. Late last month, Arete Research rated Qualcomm a Buy and slapped a $200 price target on the stock, implying more than 15% in potential upside from current levels.

With its next earnings report due in early November, this bullish momentum could easily continue to build as investors position for another upside surprise.

But the stakes are high. If Qualcomm fails once again to break through the top of its range, it risks sliding back into the frustrating sideways pattern that has defined much of its recent trading action.

Investors should keep a close eye on the stock and its RSI in the coming sessions to catch any reversal in momentum.