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Q2 earnings put Qualcomm (QCOM) back in focus

Trending interest in Qualcomm (QCOM) is being driven by its Q2 results, which paired earnings growth and record automotive revenue with expanding efforts in AI, IoT, automotive, and custom silicon for hyperscaler data centers.

See our latest analysis for QUALCOMM.

That Q2 earnings surprise and the custom AI silicon news have coincided with a sharp re‑rating, with a 48.37% 1‑month share price return and a 32.31% 1‑year total shareholder return. This suggests momentum has picked up after a quieter start to the year.

If Qualcomm’s AI and data center story has you looking beyond a single stock, it could be a good time to widen your watchlist with 39 AI infrastructure stocks

After a 48.37% 1 month surge and a 32.31% 1 year total return, with the stock trading above the average analyst price target, you have to ask: is there still an entry point here, or is future growth already reflected in the price?

Most Popular Narrative: 37.8% Undervalued

Qualcomm’s last close at $186.55 sits well below the $300 fair value in the most followed narrative, which frames the recent rally as only part of the story.

Qualcomm (QCOM) delivered a strong start to FY2025, posting record revenues of $11.7 billion (+18% YoY) and EPS growth of 24% YoY to $3.41. The company’s handset, automotive (+61% YoY), and IoT (+36% YoY) segments drove top-line expansion, while $2.7 billion was returned to shareholders through buybacks and dividends.

Read the complete narrative.

Want to understand why this narrative anchors on a much higher fair value? It leans heavily on margin strength, capital returns, and multi segment revenue momentum. Curious how those ingredients combine into that $300 figure? The full story joins the dots.

According to yiannisz, this valuation reflects record quarterly revenue, high EPS, and growth across handsets, automotive, and IoT alongside material buybacks and dividends. The result is a fair value that prices in meaningful contribution from multiple segments rather than just smartphones, with the discount rate of 8.49% used to bring those future cash flows back to today.

Result: Fair Value of $300 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, there are still risks, including reliance on handset demand and execution on AI, automotive, and IoT plans that underpin those higher fair value assumptions.

Find out about the key risks to this QUALCOMM narrative.

Another View: Our DCF Signals Less Upside

That 37.8% upside narrative contrasts with our DCF model, which puts fair value at $156.21 versus the current $186.55 share price. On this view, the stock screens as overvalued, not undervalued. This raises a simple question for you: which storyline feels more realistic?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out QUALCOMM for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 51 high quality undervalued stocks. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

Next Steps

With mixed signals on value and sentiment running in both directions, it makes sense to review the numbers yourself and move promptly to a clear stance using 3 key rewards and 1 important warning sign

Looking for more investment ideas?

If Qualcomm has put AI and semiconductors on your radar, do not stop there. Broader opportunities across sectors could suit your goals and risk comfort.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include QCOM.

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