Qualcomm's Non-Handset Revenue Shifts the Paradigm

Qualcomm's non-handset revenue growth is a significant change for the company, and it's impacting the stock price. Although the stock has risen slightly since the author's coverage initiation, it has lagged behind the broader market. The author's previous bullish calls on Qualcomm stock have not been entirely successful due to this discrepancy.

Qualcomm Incorporated (NASDAQ:QCOM) has been experiencing a notable shift in its revenue growth, with a significant increase in non-handset revenue. This change has had a notable impact on the company's stock price, which has risen slightly since the author's initial coverage but has lagged behind the broader market. The author's previous bullish calls on Qualcomm stock have not entirely materialized due to this discrepancy.

The company's strong performance in Q3 2025, with robust growth in QCT Automotive and IoT revenues, indicates a successful diversification strategy [2]. This growth is expected to continue, with the company forecasting revenues in the range of $10.3 billion – $11.1 billion for Q4 2025. However, the stock has underperformed compared to its peers like Hewlett Packard Enterprise Company (HPE) and Broadcom Inc. (AVGO), which have surged by 16.5% and 82.7% respectively over the past year [4].

One of the primary reasons for this underperformance is the ongoing U.S.-China trade spat. Qualcomm's significant presence in China, where it supplies chips and components to major smartphone manufacturers, has been negatively impacted by trade restrictions imposed by the U.S. Commerce Department. These restrictions have made it difficult for Qualcomm to maintain its operations in China, contributing to the company's financial struggles [4].

Additionally, high research and development (R&D) costs have eroded Qualcomm's margins over the years, further impacting its stock performance. Despite these challenges, the company's fundamentals remain healthy, and analysts like Arete have upgraded the stock to "Buy," increasing the price objective to $200 [1].

The recent move into AI, automotive, and IoT sectors positions Qualcomm at the forefront of emerging technologies, offering a stable core technology holding and a generator of innovation in future markets. However, the stock's valuation demonstrates that it is currently under distress, presenting an opportunity for investors to reconsider the company [1][2].

In conclusion, while Qualcomm's non-handset revenue growth has been a significant change for the company, its stock price has not fully reflected this growth. The company's challenges in China and high R&D costs have contributed to this discrepancy. However, with a healthy fundamentals and a strong outlook, Qualcomm remains an attractive investment for those seeking stability and exposure to emerging technologies.

References:
[1] https://finance.yahoo.com/news/arete-upgrades-qualcomm-qcom-stock-043554326.html
[2] https://www.techi.com/arete-upgrades-qualcomm-stock/
[3] https://coincentral.com/abu-dhabis-g42-eyes-amd-qualcomm-to-diversify-beyond-nvidia-for-ai-campus/
[4] https://www.nasdaq.com/articles/qualcomm-declines-83-past-year-time-rethink-qcom-stock