Qualcomm (QCOM) experienced a significant surge in its stock price, rising over 6% this week. This boost followed the chipmaker’s fourth quarter of fiscal 2023 release of better-than-expected results and optimistic guidance, driven by an increase in demand for mobile phones.
The company reported earnings per share (EPS) of $2.02, surpassing expectations. Despite a 24% year-over-year decrease in revenue, which amounted to $8.67 billion, both earnings and revenue exceeded forecasts.
Qualcomm is a prominent technology company renowned for its pivotal role in the telecommunications and semiconductor sectors. It specializes in the design and production of semiconductors, including the widely recognized Snapdragon processors used in smartphones and other mobile devices.
The company is a key player in wireless communication technologies, contributing significantly to the development of 3G, 4G, and 5G wireless standards. Their modems and connectivity solutions are crucial for enabling high-speed internet access and wireless data communication in a wide range of devices.
They hold an extensive portfolio of patents and licenses their intellectual property to other industry players, making it a vital source of revenue. Their involvement in mobile technologies, Internet of Things, automotive solutions, and leadership in 5G technologies solidify their status as a leading innovator in the technology landscape.
QCOM is not out of the woods yet
The company to provided a more favorable outlook for smartphone shipments with Qualcomm chips, anticipating a decline in the mid to high single digit percentage range, which was an improvement compared to its previous estimate.
Looking ahead, Qualcomm expects to achieve an EPS of $2.25 for the current quarter, with revenue projected to fall within a range of $9.1 billion to $9.9 billion. These figures exceeded analyst expectations, who had anticipated an EPS of $2.23 and revenue of $9.2 billion.
Furthermore, decline in sales we observed in the two key units of the company. Sales at the QTC unit, responsible for producing circuits and technology for mobile devices, fell by 26% to $7.4 billion. Meanwhile, the QTL division, which focuses on product licensing, saw a 12% drop in sales to $1.3 billion.
The positive stock performance this week helped Qualcomm’s shares regain a positive trajectory for 2023 after experiencing a decline in the year-to-date performance up until the end of October.
Positive outlook on the horizon
In an effort to gain insight into Qualcomm’s potential price trajectory for the upcoming year, Finbold has harnessed quantitative analysis and AI algorithms for forecasting.
As forecasted by CoinCodex, an AI-powered prediction tool, it’s anticipated that the stock’s price will drop to $97.74 at the end of the year. If this prediction materializes, it would be around a 17% decline from the current price of the stock.
The significant drop in value provides a compelling opportunity for investors to enter the market and initiate a dollar-cost averaging strategy. This strategy involves investing a fixed amount of money at regular intervals, with the additional tactic of allocating more funds when the price experiences a drop of 7 to 10%. This approach can help investors mitigate risks and potentially achieve better long-term returns.
Based on the average yearly growth of the Qualcomm stock in the last 10 years, the Qualcomm stock forecast for the beginning of next year is $ 131.73. Using the same basis, Qualcomm stock is predicted to reach 231.91 by 2023.
Based on predictions generated by the AI-powered tool CoinCodex, Qualcomm shares are anticipated to reach $144.72 at the beginning of 2025, as per data retrieved on November 5th. This projection represents approximately a 40% increase compared to Qualcomm current stock price of $103.46.
When delving into the shorter term, the algorithms suggest that Qualcomm could reach around $140 at the beginning of next year. Such an outcome would grand a noteworthy increase of 27.2% within the span of 6 months.
Skilled investors look for opportunities when stocks are undervalued and have the potential for growth. Qualcomm, despite its ups and downs, presents an excellent opportunity for those with a long-term investment perspective. It’s during these times of uncertainty that investors can often find hidden gems and potentially benefit from their future growth.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.