Will Solid Momentum in Premium Handset Vertical Drive QCOM's Growth?

Qualcomm Incorporated QCOM recently announced that Samsung, one of the major smartphone manufacturers in the world, has selected the Snapdragon 8 Elite Mobile Platform for its Galaxy Z Fold7 devices. Qualcomm Snapdragon 8 Elite comes with an Oryon CPU delivering fast speed and performance to complete most demanding applications. The advanced Qualcomm Hexagon NPU ensures a premium AI experience, powering multi-modal generative AI that understands speech, context, and images directly on the device. On-device AI, enhanced camera functionalities, connectivity, and gaming capabilities will deliver the best mobile experience to Samsung Galaxy Z Fold7 users.

Owing to its leading-edge capabilities in AI native applications, graphics, gaming, camera, display, image and audio functionalities, Qualcomm Snapdragon 8 Elite Mobile chipsets have gained solid market traction in the premium market segment. Several manufacturers, such as Xiaomi, ASUS, HONOR and Oneplus, have utilized Qualcomm’s most advanced chipset. Moreover, Samsung has also deployed the Snapdragon 8 Elite in its flagship S25 series earlier in 2025.

Healthy demand in the premium smartphone segment is driving growth in the Qualcomm CDMA Technologies (QCT) segment. In the first quarter, revenues from the QCT segment increased to $9.47 billion from $8.03 billion in the year ago quarter. In 2025, handset revenue is expected to reach $27.7 billion, suggesting 11.3% year-over-year growth. The company’s Snapdragon 7 Gen 4 chipset is also gaining popularity in the mid-range smartphone vertical. Major Chinese smartphone makers HONOR and VIVO have already selected the chip.

However, intensifying competition in the mobile phone chipset market is hurting Qualcomm’s profit. The company is facing competition from low-cost chip manufacturers like MediaTek and Rockchip in the mid-range handset vertical. Moreover, long-term clients like Apple, Inc. AAPL are moving to in-house chip development, which is hindering revenue growth. Apple is using its leading-edge, high-performing chip M4 Ultra to power its iPad Pro. Apple has also replaced Qualcomm’s RF modem in its newest iPhone 16e handset with a C1 modem, made in-house.

Qualcomm is also facing competition from Broadcom, Inc. AVGO. Broadcom is a prominent supplier of RF Components to leading smartphone makers. The company's strong relationships with leading OEMs across multiple target markets have helped it to gain key insights into the requirements of customers. This insight has helped Broadcom to be more efficient and productive in better serving the target markets and customers.

QCOM’s Price Performance, Valuation and Estimates

Qualcomm shares have declined 20.2% over the past year against the industry’s growth of 18.1%.

Going by the price/earnings ratio, the company's shares currently trade at 13.51 forward earnings, lower than 33.07 for the industry. 

Earnings estimates for 2025 have decreased 0.17% to $11.71 per share over the past 60 days, while the same for 2026 have declined 2.23% to $11.82.

Qualcomm stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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