metamorworks
Summary
- QCOM’s prospects have been drastically lifted by the recovering handset and automotive markets, further boosted by the renewed 5G Modem contract with AAPL.
- Thanks to the sustained headcount reduction and cost optimizations, we have also observed excellent expansions in its profit margins compared to pre-pandemic levels.
- QCOM remains well capitalized and has massive growth opportunities in the spatial computing market, thanks to its XR headset partnerships with META, GOOG, and SSNLF.
- With the global XR market size expected to grow drastically to $26.2B by 2029, there is a good chance the Android-based XR platforms may imitate a similar market share as that of Android-based smartphones.
- While we are rating the QCOM stock as a Buy, investors may want to observe for a little longer before adding at $130, depending on their dollar cost averages and risk appetite.
We previously covered Qualcomm (NASDAQ:QCOM) in August 2023, discussing its overly fast and furious rally then.
This was attributed to its uncertain near-term prospects attributed to the potential loss of Apple (AAPL)/ Huawei revenues, elongated smartphone replacement cycle, and intensified automotive SaaS market competition.
While we had always been bullish on the stock, we had chosen to downgrade our rating to a Hold then, since it might be more prudent to monitor the situation a little longer.
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