Qualcomm's Bold Growth Plan: A Closer Look at the 7% Share Drop

Qualcomm's (QCOM) shares took a 7% tumble recently, following the company's Investor Day presentation. CEO Cristiano Amon painted a picture of Qualcomm tackling a $900 billion market by 2030, driven by growth in automotive, IoT, and other connected tech segments. However, investors seemed unconvinced, questioning whether the company can hit these targets while navigating slowing smartphone sales and heavy reliance on China.

Qualcomm's diversification strategy aims to offset these headwinds. The company projects $22 billion in combined automotive and IoT revenues by FY29, with $8 billion from automotive and $14 billion from IoT. This shift aligns with the growing demand for connected devices and vehicles, presenting a significant opportunity for Qualcomm. However, analysts are cautious, with Deutsche Bank flagging potential trouble from Apple reducing its use of Qualcomm chips. Barclays also expressed skepticism about IoT growth projections, given recent performance.



Investors seem focused on whether these new markets can ramp up quickly enough to offset headwinds in the core handset business, where competition is fierce, and geopolitical risks loom large. Some analysts, like Bernstein, remain optimistic, noting that Qualcomm's earnings power remains strong even without Apple. However, the message from Wall Street is clear: big visions are great, but Qualcomm will need to show concrete progress before investors are ready to climb back on board.



Qualcomm's leadership in generative AI, edge computing, and next-gen automotive tech positions it well for long-term growth. The company's unique position at the edge is driving access to an expanded TAM of approximately $900 billion by 2030, with more than 50 billion cumulative connected edge device shipments expected from 2024 through 2030. As generative AI accelerates demand for their technology, Qualcomm is well-positioned to address this $900 billion opportunity across an expanding ecosystem of new customers and partners.

In conclusion, Qualcomm's bold growth plan faces challenges and skepticism from investors. However, the company's leadership in cutting-edge technologies and its strategic shift towards automotive and IoT markets present significant opportunities. As Qualcomm continues to execute on its diversification strategy, investors will be watching closely for concrete progress in these new markets.