It’s been a rough start to the week for most stocks. But for higher-growth companies in sectors such as semiconductors, investors in companies like Qualcomm (NASDAQ:QCOM) have seen more volatility than others as investors continue to battle a range of macro headwinds. With tariff talk heating up over the weekend (but tariffs ultimately paused on neighboring Canada and Mexico), Chinese tariffs still look to be in play, which could affect the outlook of many companies with close ties to china.
Qualcomm is one such chip maker, which has benefited from partnerships with other American companies to produce key components for smartphones made in China. The key chipset supplier for Apple, Qualcomm has already seen its fair share of headwinds, with Apple designing its own chips and forcing Qualcomm to re-think its growth model moving forward.
The company has done just that, and many analysts believe the company is well-positioned for growth in 2025. That said, some analysts believe this stock could have as much as 17% downside over the next year, and with so much uncertainty in the markets right now, there’s a case to be made that Qualcomm’s upcoming earnings report could be the catalyst for big downside ahead.
Let’s dive into what to expect form this company’s earnings, and if this is a stock to buy or sell right now.
Key Points About This Article:
- Qualcomm is one of the companies that has been caught in the crossfire from tariff talk, but has regained most of its recent losses.
- Here’s what to look for as the chipset maker is set to report its quarterly earnings on February 5.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.
What Wall Street Analysts Expect
Qualcomm is set to release its Q1 fiscal 2025 earnings report on February 5, 2025, with analysts projecting solid revenue and earnings growth despite concerns over stock valuation. The consensus earnings per share (EPS) estimate stands at $2.93, reflecting a 6.6% year-over-year increase, with recent upward revisions suggesting growing confidence in Qualcomm’s performance. Revenue is expected to reach $10.92 billion, representing a 9.9% annual growth, although some estimates place it slightly lower at $10.90 billion.
Analyst sentiment leans bullish, with Qualcomme receiving a consensus buy rating, with analysts and market participants generally expecting a positive surprise from this print. While some analysts have suggested this stock could have potential 17% downside (or more) over the next year, recent upside momentum suggests that so long as numbers come in line (or close to it) this coming quarter, investors may have something to cheer ahead.
Key Catalysts to Watch in 2025
Among the reasons for optimism among Qualcomm bulls, the company does have a number of key growth catalysts that look to be playing out this year. The company’s advancements in both its AI and 5G capabilities provide two solid growth catalysts for investors to grasp onto. And as 5G adoption continues to accelerate globally, expectation is that demand for Qualcomm’s high-performance chips will continue to rise, particularly in the smartphone and IoT devices segments. Analysts also expect AI integration to enhance Qualcomm’s product capabilities, strengthening its market position.
Beyond smartphones, Qualcomm is making major strides in the automotive sector, particularly in Advanced Driver Assistance Systems (ADAS) and autonomous driving technologies. The automotive chip segment is expanding rapidly, with Qualcomm well-positioned to capture growing demand for connected vehicle solutions. Additionally, while IoT adoption has faced challenges, Qualcomm’s innovations in industrial applications and on-shoring trends could open new revenue streams.
Competitively, Qualcomm is gaining market share from MediaTek, particularly in the AI-powered smartphone sector, with projections indicating it could control over 50% of this market by 2028. Analysts have also revised earnings forecasts upward, signaling investor confidence in Qualcomm’s long-term financial strength.
Long-Term Outlook
My opinion on Qualcomm heading into its upcoming earnings report is that this is a particular chip stock that may be far too risky to short, even for those with bearish sentiment on the overall chip space. At some point, we could see demand peak out (or at least flatline), but with Qualcomm’s chips used in far more than just smartphones, and a number of growth drivers underpinning the company’s upside potential, this is a stock that could see upside over the long-term.
Yes, there are certainly risks for the company’s Arm-based PC CPUs which continue to face compatibility issues. But with Qualcomm now aiming to re-enter the server CPU space, hiring Intel veteran Sailesh Kottapalli to lead its data center team, there’s a lot to like about the company’s potential over the medium-term. Despite PC chip challenges, Qualcomm’s efficiency and performance advancements could strengthen its push into data centers.
We’ll have to see how these numbers come in, but I do think Qualcomm looks like a hold heading into this print. That view may change, depending on how the numbers come in, but this is a stock that doesn’t look to have 17% downside from here, at least not in the short term (in my view).
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.