#1 - Qualcomm (NASDAQ:QCOM)
The semiconductor sector is notoriously cyclical. And that’s been on full display in the last few years. In 2021, chip stocks soared on anticipation of higher demand. However, they dropped sharply in 2022 as supply chain issues curtailed supply.
While many of these stocks are bouncing back in 2023, Qualcomm Incorporated (NASDAQ: QCOM) has lagged behind. And not without reason. Revenue and earnings in the first two quarters of the year are down on a year-over-year basis. This is attributed to the company’s significant reliance on the mobile device and PC markets, both of which are reporting slowing sales.
But there’s reason for optimism. Qualcomm chips dominate the automotive market with an impressive 80% market share. And with relationships with most major car manufacturers, that dominance is unlikely to change.
Currently, that revenue only accounts for about 5% of the company's top line. But it was up 20% in the most recent quarter and will likely continue to grow. Add in possible gains from artificial intelligence (AI) and the internet of things (IoT) and you can see why Qualcomm is an undervalued stock that could bounce back in a big way.
About QUALCOMM
QUALCOMM Incorporated engages in the development and commercialization of foundational technologies for the wireless industry worldwide. It operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI). The QCT segment develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies for use in wireless voice and data communications, networking, computing, multimedia, and position location products.
Read More - Current Price
- $156.55
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 15 Buy Ratings, 12 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $210.15 (34.2% Upside)
