Qualcomm Upped to Buy by Arete, Target Raised to $200

Arete analyst Brett Simpson upgraded Qualcomm to Buy from Neutral with a $200 price target.

Arete analyst Brett Simpson has upgraded Qualcomm to "Buy" with a price target of $200, reflecting a bullish outlook on the company's strategic pivot towards AI and 5G technologies. The upgrade comes on the heels of Qualcomm's strong Q2 2025 earnings report, which demonstrated resilience despite a projected 30% reduction in Apple chip orders due to the iPhone maker's in-house 5G modem development [1].

Qualcomm's acquisition of Alphawave Semi and the adoption of the X85 5G modem have solidified its leadership in edge computing. The X85 modem, the first AI-powered 5G platform, is already being adopted by major carriers in the U.S., China, and Japan, positioning Qualcomm at the forefront of 5G Advanced (3GPP Release 18) adoption [1]. The integration of AI into Snapdragon platforms, such as the Moto.ai feature on the Motorola Razr Ultra, further underscores Qualcomm's commitment to reducing latency and data costs through on-device processing [1].

The analyst's upgrade also highlights Qualcomm's strategic diversification into non-handset markets, which are growing at a faster pace than its smartphone business. The Snapdragon Digital Chassis for automotive applications, for instance, saw a 59% year-over-year revenue increase in Q2 2025, with 30 new design wins for ADAS systems. By 2029, the automotive segment is projected to contribute $8 billion annually [1]. Similarly, IoT revenue reached $1.6 billion in 2024, growing 27% year-over-year, driven by partnerships like Palantir's edge AI solutions and the acquisition of Edge Impulse [1].

Qualcomm's investment in small AI models that rival cloud-based large models is a game-changer. By enabling advanced AI workloads directly on Snapdragon chips, the company reduces dependency on data centers, offering cost and latency advantages. Strategic partnerships with Microsoft (Fi), Google (Nano), and Alibaba (Quen) ensure Qualcomm's platforms are optimized for the latest AI models [1].

While near-term challenges persist, such as potential revenue hits from Apple's chip transition in fiscal 2026 and regulatory uncertainties, Qualcomm's long-term prospects remain robust. The company's $22 billion non-handset revenue target by 2029 suggests a strong growth runway if execution remains consistent [1].

For growth-oriented investors, Qualcomm's strategic pivot to AI and edge computing offers a compelling value proposition. The company's leadership in 5G Advanced modems, coupled with its expanding presence in automotive, IoT, and XR, positions it to capitalize on multi-decade trends. The Arete upgrade validates this trajectory, signaling confidence in Qualcomm's ability to navigate near-term headwinds while scaling its AI-driven ecosystem [1].

References:
[1] https://www.ainvest.com/news/qualcomm-strategic-position-ai-5g-growth-catalyst-long-term-2508/
[2] https://www.marketbeat.com/all-access/analyst-rankings/2006/