On Thursday, Morgan Stanley (NYSE:MS) adjusted its outlook on Qualcomm Inc (NASDAQ:QCOM), increasing the stock's price target to $172 from the previous $158 while maintaining an Equalweight rating. The firm acknowledged the semiconductor company's strong performance despite current difficulties in the smartphone supply chain.
Qualcomm has been navigating through several challenges, including an expected share loss within the Samsung (KS:005930) platform, returning to the usual historical split, and the loss of Huawei's 4G business as the company shifts to its own 5G solutions.
Despite these hurdles, Qualcomm has managed to achieve notable growth, especially with a 40% year-over-year increase in business from China OEMs, a trend that is expected to continue into the June quarter.
The company's success has been attributed to significant content gains and a robust presence in the premium tier handset market. Morgan Stanley highlighted Qualcomm's ability to increase premium tier content, with potential for further growth of more than 10%.
For the current year, Morgan Stanley projects modest revenue growth in the handset segment for Qualcomm, anticipating low to mid-single-digit increases. Still, the outlook for calendar year 2025 is more optimistic, with expectations of market share stabilization and prospects for improvement.
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