Qualcomm, a semiconductor company, has been making waves in the news recently due to updates on Huawei and Samsung. Despite facing some challenges, Qualcomm remains a promising long-term investment option at its current valuation. In the past, Qualcomm has shown positive growth and AI tailwinds, making it an attractive choice for investors.
Recent news surrounding Qualcomm includes the sanctions against Huawei by the U.S. government, affecting companies like Qualcomm and Intel Corporation. While this may have a negative impact, Qualcomm is not solely dependent on Huawei for revenue. Additionally, Qualcomm’s chips are not primarily designed for gaming, so issues with specific programs on Samsung’s new notebook are unlikely to have a long-term effect on Qualcomm’s performance.
Active managers have been increasing their exposure to Qualcomm, signaling confidence in the company’s future prospects. This is a positive indicator for Qualcomm, as these managers see potential in the company compared to others in the semiconductor industry.
Looking ahead, Qualcomm is set to report its fiscal third-quarter earnings results, with analysts forecasting a 9% increase in revenues. The company has a track record of outperforming expectations, which bodes well for its upcoming earnings report. Revenue growth is expected to be driven by factors such as higher licensing revenue and growth in the automotive business.
Despite not being a bargain at its current valuation, Qualcomm is still considered a solid investment option. With positive earnings growth outlook and potential total return tailwinds, Qualcomm has the potential to grow its earnings per share significantly in the coming years. Analysts are forecasting strong earnings per share growth for the current year and beyond, making Qualcomm an attractive choice for investors looking for long-term growth opportunities.
In conclusion, despite facing some challenges in the current market, Qualcomm remains a promising investment option with strong growth potential. With a positive earnings outlook, a compelling shareholder return program, and an undemanding valuation, Qualcomm is well-positioned for future success. Investors looking for a solid long-term investment option may find Qualcomm to be a promising choice in the semiconductor industry.
