Artificial intelligence has helped the semiconductor industry achieve another great year, but not all companies in the semiconductor industry have performed equally well this year. One company lagging some of its peers is Qualcomm (QCOM). Investors’ concerns primarily revolve around the pace of recovery in the smartphone market and the company’s transition into new growth areas like AI PCs, automotive, and data center processors.
This is why the coming Wednesday’s release of fiscal third-quarter earnings results is especially critical for Qualcomm. Even though Wall Street is expecting year-over-year (YoY) falls in both revenues and EPS, Qualcomm’s management has always insisted that the company’s long-term opportunity stretches far beyond the company’s smartphone business. The company is scheduled to report its results after the close of the market on July 29.
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About Qualcomm Stock
Qualcomm is one of the top semiconductor firms in the world, developing mobile processors, wireless technologies, automotive semiconductors, Internet of Things processors, and artificial intelligence hardware products. The company is headquartered in San Diego, California, and has a market capitalization of approximately $179.2 billion, ranking among the largest fabless semiconductor design firms.
Stocks of the company have been having a tough year. Presently, QCOM stock is trading at around $163 per share, 37% below its 52-week high of $259.92 but still 36% above its 52-week low of $121.99.
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Despite the current concerns about the company’s prospects, Qualcomm’s valuation appears to be significantly lower than most semiconductor stocks with ties to artificial intelligence. Its stock trades at approximately 20.9 times forward earnings and 4.0 times sales, both figures being notably lower than many other semiconductor firms. This relatively low valuation indicates that investors are skeptical about the firm’s ability to increase revenues during its transition into…
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