SWKS - Qualcomm's Expansion Into AI And IoT: Reasons To Consider Buying The Stock
2024-04-01 15:39:34 ET
Summary
- Qualcomm Incorporated was an early innovator of wireless technologies.
- It has a high customer concentration risk.
- Qualcomm is diversifying into new growth markets such as mobile AI chips, automotive technology, IoT, and VR/AR/MR chips.
After a considerable downdraft in QUALCOMM Incorporated 's (QCOM) stock price since the beginning of 2022 due to a declining mobile phone market, investors started waking up to its potential opportunity in generative Artificial Intelligence ("AI") near the end of 2023. Although the company may no longer be a go-go growth stock, when investors began looking around for companies that could benefit from the proliferation of generative AI, they found Qualcomm selling for an excellent value and a massive opportunity for providing chipsets that can run AI algorithms locally on a device rather than some far-away cloud. The stock started rising after closing at $103.59 on October 25, 2023, and has never looked back.
On January 8, 2024, Cathie Wood and Ark Invest started buying Qualcomm for two of their ETFs. On January 12, 2024, Citi Research upgraded the stock to a buy, raising the target price to $160 from $110. The day Citi raised the target, the stock was trading around $140. So, the company's positive attributes are no longer flying under the radar. Its closing price on March 27, 2024, shown on the chart above, is up 63% from its closing price on October 25, 2023. After the sharp rise in stock value over the last five months, some may wonder if they missed the boat on this one. However, although some might question the valuation, I believe investors still have the potential upside in Qualcomm to buy it at the current price. ...
Qualcomm's Expansion Into AI And IoT: Reasons To Consider Buying The Stock