Tuesday, July 9, 2024—Today, a KeyBanc analyst has increased the price target for Qualcomm (NASDAQ: NASDAQ:QCOM) shares to $225 from the previous target of $205, while maintaining an Overweight rating on the stock. The adjustment reflects a positive long-term outlook for the company's role in edge-AI technology, despite some near-term market risks.
Qualcomm, known for its presence in the smartphone and PC industries, is facing a challenging environment in the near term. The analyst pointed out that demand for Android smartphones in China is weakening, with iPhone demand on the rise and gaining market share.
Additionally, there is a concern over high customer component inventory levels, which may pose a risk to handset estimates. Moreover, the recent launch of Qualcomm's ARM CPU SnapDragon Elite X has received mixed feedback.
Despite these immediate challenges, the firm's analyst believes Qualcomm is well-positioned for the future, particularly as an edge-AI player in both smartphones and PCs. This potential for growth is expected to continue to revalue the stock over time.
Furthermore, Qualcomm is anticipated to benefit from its relationship with Samsung (LON:0593xq), with expectations to regain full share on the upcoming GS25 model. This change alone could contribute an additional $1.6 billion in revenue generation over generation.
The price target increase to $225 is based on forecasts that exceed the consensus for Qualcomm's revenue and earnings per share in the fiscal year 2025. The analyst's outlook remains Overweight, indicating a confidence in Qualcomm's capacity to perform well in the long term, driven by its strategic position in the expanding edge-AI market.
In other recent news, Qualcomm Inc has been the center of attention with several positive analyst actions. TD Cowen has raised its price target on the company's shares to $235 from the previous $200, maintaining a Buy rating.
Mizuho Securities also increased its price target from $180 to $240, reiterating its Buy rating, and maintained its revenue and EPS estimates for the June quarter at $9.21 billion and $2.25, respectively. Moreover, Qualcomm has agreed to a $75 million settlement to resolve allegations by shareholders regarding anticompetitive sales and licensing practices.
Meanwhile, SenseTime, a Chinese AI firm, introduced its latest product, the SenseNova 5.5, at the World AI Conference held in Shanghai. This new large language model is being positioned as a competitor to OpenAI's GPT-4. Liu Qingfeng, chairman of Iflytek, emphasized the importance of China having its own independently developed LLMs that meet the highest global standards.
Samsung Electronics (KS:005930) has been actively engaging with top industry leaders, including Qualcomm, to explore avenues of cooperation in areas such as artificial intelligence, cloud services, and semiconductor technology. These recent developments highlight the ongoing dynamism and collaboration within the tech industry.
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