Qualcomm’s Augmented Reality Ambitions: A Hedge Fund-Favored Play on the Future of Tech

The global augmented reality (AR) market is poised for explosive growth, with forecasts predicting a compound annual growth rate (CAGR) of 42.36% between 2024 and 2029, reaching $248.38 billion by the latter year. Among the companies best positioned to capitalize on this trend is Qualcomm Inc. (NASDAQ: QCOM). Hedge funds have taken notice: institutional holdings in QCOM surged by 41.04% between December 2024 and March 2025, with over 79 funds now holding the stock. This article explores why Qualcomm stands out as a top AR investment—and what its future holds.

The AR Playbook: Qualcomm’s Technological Edge

Qualcomm’s dominance in AR stems from its Snapdragon XR2 platform, a chipset that powers next-generation AR devices, smart wearables, and automotive systems. The XR2 emphasizes spatial computing, enabling real-time environmental mapping, gesture recognition, and low-latency rendering—all critical for seamless AR experiences. Partnerships with industry leaders like Microsoft (HoloLens) and Sony (AR/VR headsets) have expanded Qualcomm’s reach into enterprise and consumer markets.

Beyond hardware, Qualcomm’s MovianAI acquisition in April 2025 signals its intent to lead in AI-driven AR. This generative AI division will accelerate development of on-device processing capabilities, reducing reliance on cloud infrastructure and enhancing security. In healthcare, for instance, Qualcomm’s chips now power AR tools that reduce surgical errors by 30%, with the healthcare AR segment projected to hit $1.2 billion by 2024.

Why Hedge Funds Are Betting Big

Hedge funds have been aggressively increasing stakes in QCOM. As of March 2025, GAMMA Investing LLC held 3.26 million shares, while Rhumbline Advisers and Douglas Lane & Associates followed closely. The aggregate institutional holding rose from 7.6 million to 10.8 million shares in three months—a clear vote of confidence.

Analyst Sentiment: A Bullish Consensus

Analysts are uniformly enthusiastic. J.P. Morgan reaffirmed a Buy rating with a $185 price target, citing Qualcomm’s Q2 2025 EPS estimate of $2.82 and $10.61 billion in revenue. DBS analyst Fang Boon Foo upgraded QCOM to Buy, highlighting its $8 billion automotive revenue target by 2029 and its role in Apple’s supply chain until 2026. Meanwhile, Mizuho sees a $240 price target, driven by AR’s contribution to the $35 billion automotive segment.

The average analyst price target stands at $203.35, implying a 25% upside from current levels. Qualcomm’s forward P/E of 14.74x is nearly half the sector average (25.42x), making it a bargain despite its growth trajectory.

Financial Resilience and Diversification

Qualcomm’s fiscal 2024 results underscore its strength: $39 billion in revenue (+9% YoY) and $10.1 billion in net income (+40% YoY). Automotive revenue grew 68% year-over-year, while IoT showed signs of recovery. The company returned $7.81 billion to shareholders in 2024 via dividends and buybacks, bolstering its appeal to income-focused investors with a 2.03% dividend yield—above the tech sector’s 1.37%.

The Risks and Mitigations

• Apple’s In-House Modems: Concerns about reduced iPhone dependency are mitigated by Qualcomm’s $10 billion non-handset revenue run rate (automotive, IoT).
• AI Competition: Firms like DeepSeek may pressure pricing, but Qualcomm’s low-power AI chips offer a cost advantage.

Conclusion: Qualcomm’s AR Future Is Now

Qualcomm is no longer just a chipmaker—it is a pioneer of the AR ecosystem, with a 42.36% CAGR tailwind and partnerships spanning healthcare, automotive, and consumer electronics. Its $22 billion non-handset revenue target by 2029—bolstered by AR-driven growth—aligns with institutional investors’ long-term vision. With a strong balance sheet, undervalued stock, and dividend resilience, QCOM offers a rare blend of growth and stability.

For investors seeking exposure to the AR revolution, Qualcomm’s Snapdragon platform, AI advancements, and diversified revenue streams make it a standout pick. As the market matures, this hedge fund favorite is primed to deliver returns that mirror the scale of its technological ambitions.