QCOM tries to rebound after selloff. Will the comeback last?
The semiconductor sector has had a strange year. While AI stocks spent 2025 grabbing headlines and posting rocketship gains, many traditional chipmakers were hamstrung by cooling enthusiasm.
Even otherwise strong companies like Qualcomm were impacted, with the wireless giant now trading roughly 25% below its January highs after cautious guidance spooked investors.
Nevertheless, some analysts think the selloff was overdone. A handful of firms have recently upgraded the stock, arguing that Qualcomm’s diversification into robotics, automotive tech, and next-gen wireless could reignite growth.
The good, the bad, and the ugly
When trying to determine whether the recent rebound is the start of a breakout or just a temporary bounce, it’s probably smart to start with the fundamentals. Although Qualcomm’s latest earnings report wasn’t disastrous, the outlook raised some questions:
- Q1 EPS came in at $3.50 vs. $3.38 expected
- Revenue of $12.25B beat the $12.16B forecast
- Year-over-year growth registered at 4.7%
But forward guidance disappointed investors, which is just one of several risks that remain. For example, US-China trade tensions could limit Qualcomm’s access to key markets. Smartphone demand, which supports the company’s core business, has been slowing. Memory shortages are putting a squeeze on device production. And top it all off, profit margins have slipped to around 12%.
Meanwhile, insiders are selling to the tune of about 45,500 shares over the past three months as estimates for 2026-27 have been revised lower.
Some encouraging signals are coming through, including automotive chip revenue above $1.1 billion for the second straight quarter. New robotics processors, including the Dragonwing chip, could open up new growth channels. And the company is investing heavily in 6G wireless tech expected later this decade.
If these new businesses can offset slowing smartphone growth, Wall Street sees a compelling long-term case.
Bulls vs. Bears: Who has the winning argument?
Institutional investors remain divided, which feels right given Qualcomm’s across-the-board data:
- About 74% of QCOM stock is owned by institutions
- Analysts currently assign it a “hold” consensus rating
- Average price targets imply roughly 24% upside
Some firms are especially optimistic. Loop Capital and Wells Fargo recently lifted their outlooks and set $185 price targets, suggesting potential gains of 30%+.
Others remain cautious, including BofA, which warns that the company faces slower long-term growth as major customers are increasingly designing their own in-house chips.
Boom-bust-recovery cycles are fairly common in the chip trade, so analysts aren’t panicking at the moment.
The bottom line is that Qualcomm has a stake in several powerful long-term trends, including mobile computing, connected vehicles, robotics, and wireless networks. When a company with those strengths hits a rough patch, smart money remains focused on the long-term growth story instead of the momentary moves.