The latest news released by Qualcomm (QCOM.US) at its investor event highlights the chipmaker's diversification potential.
The Zhitong Finance App notes that Wall Street investment banks have said that the latest news released by Qualcomm (QCOM.US) at its investor event highlights the chip maker's diversification potential.
Samik Chatterjee, an analyst at J.P. Morgan Chatterjee, wrote in a report: “Qualcomm's IoT and Automotive Diversification Investor Day exceeded investors' expectations. Qualcomm will diversify from the smartphone market to other markets by 2030, with the goal of achieving 50% non-smartphone QCT exposure by FY2030, compared to 45% before the event began.”
He rated Qualcomm as “Overweight,” with a price target of $200.
Although the financial targets set by Qualcomm management (such as reaching $14 billion in revenue for the IoT division by fiscal year 2029) may outline a “steady” diversification path, investors are more likely to focus on the upward and downward risks of IoT goals, as the company's previous plans in 2021 were not realized. Chatterjee added that the outlook for the mid-term smartphone market is not promising either.
Even so, Chatterjee said, “After achieving the planned diversification, there is still a strong opportunity for stock price growth to be re-evaluated.”
Several other research firms have similar ideas, including Baird analyst Tristan Gerra, who said the company's relevance is “increasing” across multiple industries. Raymond James analyst Srini Pajjuri said he was “impressed” by Qualcomm's diversification strategy, but issues related to Apple modems could “keep revenue/earnings per share growth sluggish for the next 2-3 years.”
Also, Qualcomm CEO Cristiano Amon told the media on Wednesday that no large-scale acquisition targets have been set, and there is speculation that it may bid for Intel as early as next year.
