Qualcomm stock has 18% upside, says 1 Wall Street analyst

According to KeyBanc's supply chain study, there is a robust demand for high-end and flagship cellphones. John Vinh, an analyst at KeyBanc, thinks this is good news for Qualcomm (NASDAQ: QCOM).   

Vinh increased his price objective for Qualcomm stock from $180 to $205 and reaffirmed his overweight rating at the beginning of the week. Over the following twelve months or so, the new price objective might lead to an upside of almost 18%.  

Increasing market dominance Qualcomm is gaining ground in the smartphone market, according to KeyBanc. Depending on the model and market, Samsung's Galaxy S24 family used either Qualcomm's Snapdragon chips or its own Exynos chips. However, according to KeyBanc, Qualcomm will reclaim 100% of the market share for Samsung's next Galaxy S25 family.  

KeyBanc predicts that Qualcomm will overtake MediaTek, a Taiwanese company, in the mid-range market. Counterpoint Research reports that Qualcomm's market share for smartphone processors fell from 32% in Q3 2022 to 23% in Q4 2023. With a dominant presence in budget and mid-range phones, MediaTek dominates the global market.  

An opportunity with Arm PCs Qualcomm has good chances in the smartphone industry, and KeyBanc thinks the PC sector is where the company can really shine. Early benchmarks show promise for the Windows laptops that will be launched later this year, powered by Qualcomm's forthcoming Elite X CPUs.

Convincing buyers to buy a laptop from a company other than Intel or Advanced Micro Devices will be difficult. An Arm-based laptop powered by a Qualcomm processor might be a long way off before the ordinary laptop shopper gets on board.  

Must I purchase Qualcomm stock? Qualcomm is projected to have earnings per share of approximately $9.75 this year, resulting in a forward price-to-earnings ratio of approximately 17.5 according to analysts.   

Considering the company's potential for development in the mid-range smartphone and PC markets, that valuation doesn't appear excessive.  

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