Bank of America has raised its price target for Qualcomm from $200 to $215 while maintaining a buy rating, showing confidence in the company’s momentum. The analyst notes that Qualcomm had a strong quarter, with revenues up 10% compared to the Street’s 5.1% estimate, driven by a 13.2% growth in its QCT segment.
The growth in Qualcomm’s QCT division was seen across all segments, with Handsets, Auto, and IoT recording increases of 14.2%, 17.1%, and 7.4% respectively. However, Bank of America also highlighted that Qualcomm’s intermediate term outlook may face challenges due to unsustainable handset trends, with expectations of a slowdown in strength in the second quarter of 2026.
While Qualcomm’s diversification into automotive and IoT markets shows promise, the bank believes that the company’s reliance on handset revenues, which may have peaked for the cycle, poses a risk. Bank of America’s raised price target suggests room for growth, provided Qualcomm continues to focus on expanding into automobiles, IoT, and new data-center opportunities.
The quarter’s performance exceeded expectations across various operational metrics, with the QCT segment outperforming in every area. Total revenue was up 10% year over year, with the QCT segment seeing a 13.2% increase. Handsets, automotive, and IoT segments also showed strong growth, contributing to Qualcomm’s positive results.
Looking ahead, Bank of America expects Auto and IoT to play a more significant role in Qualcomm’s long-term growth trajectory, offsetting potential challenges in the handset market. The bank’s optimism is tempered by the cyclical nature of smartphone sales, driven mainly by Chinese demand and high-end model releases.
Qualcomm’s expansion into new markets, such as automotive, IoT, and data centers, is seen as crucial for sustaining growth beyond the smartphone cycle. The company’s focus on connected devices and AI infrastructure is expected to drive future revenue streams and value creation.
As Qualcomm navigates the changing landscape of the tech industry, investors will closely monitor key milestones, such as progress on data-center products, developments in the Apple modem transition, and market share dynamics in the smartphone segment. These factors will determine whether Qualcomm’s growth trajectory aligns with long-term potential or short-term fluctuations.
In conclusion, Qualcomm’s evolution beyond smartphones into emerging technologies like automotive, IoT, and data centers presents opportunities for growth. By diversifying its revenue streams and focusing on innovation, Qualcomm aims to position itself for sustainable success in the dynamic tech landscape.
