Bernstein Analyst Sees Upside in Beaten-Down Qualcomm (QCOM)

QUALCOMM Incorporated (NASDAQ:QCOM) is one of the AI Stocks in the Spotlight Today. On July 28, Bernstein SocGen Group analyst Stacy Rasgon reiterated an “Outperform” rating on the stock with a $185.00 price target.

The firm believes that QCOM is “heavily out of favor” due to general smartphone market weakness, tariff concerns, and near-term earnings challenges related to Apple rolloffs.

“Qualcomm remains heavily out of favor amid general distaste of smartphones, tariff concerns, near-term muted numbers (AAPL rolloff etc). And we get it, with concerns over (similar to other markets) tariff-related pullfoward, AAPL declines about to kick off muting earnings growth over the next several years, a likely general lack of near-term visibly from management especially with 232 tariffs coming soon (likely sometime in the next few weeks so we shall see how they guide with them on the way) and a general lack of catalysts for now."

"And yet, we still believe there is value to be had under the surface, with an objectively strong product portfolio and an adjacency story that looks increasing real (with option value to boot) that should become more and more obvious as AAPL winds out of the numbers over time. Perhaps there is no rush to get involved (yet) but valuation reflects this with the stock at a >40% discount to the S&P and a 50% discount to the SOX); ex-AAPL we believe the company could grow earnings double-digits (for which you are paying only ~15-16x); Catalyst or not, it seems a worthwhile name to keep on your back burner at least. Outperform, $185 PT.”

QUALCOMM Incorporated (NASDAQ:QCOM) develops wireless technologies, supplies chips for mobile, automotive, and IoT, licenses patents, and invests in emerging tech.

While we acknowledge the potential of QCOM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.