Benchmark analyst Cody Acree has initiated coverage on Qualcomm Inc QCOM with a Buy rating and a price target of $200. Acree said Qualcomm is particularly well positioned to capitalize on the industry’s trends of shifting AI computational inferencing workloads to the very edges of the network, where the company is leveraging its strengths in wireless connectivity and computing to lead the market in the ramp of generative AI smartphones and AI-PCs, with both likely sparking long-term replacement cycles in their respective markets. He noted that these replacement cycles should counter investor concerns of core market stagnation.
The company also leverages its wireless and compute strengths to capitalize on the opportunity to grow into new markets such as Autos and IoT. Acree heard encouraging feedback from multiple industry checks, suggesting at least 15-20% annual increases in the volumes of Samsung S24 smartphone variants as compared to last year’s S23 volumes. He sees solid anecdotal indications regarding consumer demand for the QCOM-powered S24 Ultra model across the U.S. and Europe. These positive Samsung indications should be echoed in QCOM’s earnings report and help offset a weaker seasonal add from Apple Inc AAPL.
The analyst flagged Counterpoint Research, expecting Qualcomm to capture over 80% of the GenAI smartphone market for the next two years as GenAI drives smartphone refresh rates. He also highlighted Qualcomm’s growth from higher adoption of AI PCs and stronger automotive activity. Acree projected second-quarter revenue and EPS of $9.41 billion and $2.35.
Qualcomm stock gained 38% in the last 12 months. Investors can gain exposure to the stock via First Trust Nasdaq Semiconductor ETF FTXL and IShares Semiconductor ETF SOXX. Price Action: QCOM shares closed higher by 0.73% at $161.35 on Tuesday.
