Surging over 53% so far in 2024, Qualcomm (NASDAQ:QCOM) stock is seeing strong price appreciation this year. Yes, the stock has dipped recently, but it has seen robust demand materialize into a rising stock price.
The question is whether this growth can continue. The Mizuho Group thinks so, placing a $240 price target on the stock, adding more optimism for Qualcomm investors.
With its strong revenue from its automotive segments, the company saw a 35% increase in the previous quarter. This places Qualcomm in a good light for continued growth and gains in the near future.
QCOM Stock and AI
Qualcomm lags in the AI race, but saw a surge in its stock this year, up 57% to $227 per share at the time of writing. CFRA upgraded the company, citing optimism about AI in mobile and PC processors.
CFRA analyst Angelo Zino upgraded Qualcomm to Buy with a target price of $260, citing Qualcomm’s potential in AI-driven devices like smartphones.
He noted Qualcomm’s leading role in supplying chips for Samsung’s S24 Ultra and other premium phones.
Zino highlighted positive prospects for Qualcomm, anticipating strong iPhone 16 sales and advancements in Samsung and Chinese smartphones.
Qualcomm is expanding into AI-capable PCs, challenging Intel and AMD, with support from Microsoft (NASDAQ:MSFT) using Snapdragon chips.
However, Qualcomm faces legal challenges from Arm Holdings regarding its Nuvia acquisition, alleging unauthorized use of Arm’s designs in Qualcomm’s PC chips.
CoPilot+ PCs Powered by SnapDragon X
Microsoft’s full embrace of artificial intelligence has proven highly successful. Once stagnant, Microsoft now competes closely with Apple for the title of the world’s most valuable company, buoyed by its ongoing rollout of Copilot AI features.
The latest evolution requires dedicated AI acceleration, now supported by Qualcomm’s Snapdragon X chips in new PCs.
This development introduces AI processing capabilities as a standard spec alongside traditional CPU speed and memory in laptops, marking a significant shift in PC hardware capabilities.
While basic Copilot functionality accessed AI workloads in the cloud, Copilot+ now demands a specialized neural processing unit.
Lower-Cost Versions On the Way
Tech analyst Ming-Chi Kuo predicts that by the end of 2024, two million notebooks will feature Windows 11 Copilot+ powered by Snapdragon X Elite and Snapdragon X Plus chips.
Microsoft, Dell, HP, Lenovo, Samsung, Acer, and Asus have already started shipping these notebooks, with Qualcomm’s Snapdragon X Elite processors slated for future PCs of various form factors.
Kuo forecasts a 100 to 200 percent increase in PCs equipped with Snapdragon X series chips by 2025 compared to 2024.
Kuo hinted at Qualcomm’s plan to change Snapdragon X Elite and Plus chips to reduce product costs, citing unnamed sources.
He also forecasts a new processor code-named Canim, slated for Q4 2025, aimed at mainstream PCs priced from $599 to $799, contrasting with current Qualcomm X-based notebooks starting at $999.
Don’t Miss Out on QCOM Stock
Qualcomm’s financial performance has shown improvement, with anticipated growth driven by increased AI integration in smartphones.
After overcoming previous challenges, the chipmaker reported a modest 1% year-over-year revenue increase in Q2 FY24, marking a turnaround from previous revenue declines.
Net income surged by a promising 37% compared to the same quarter last year, exceeding expectations with EPS reaching $2.06, surpassing Qualcomm’s guidance.
The forthcoming launch of the Snapdragon X platform is expected to bolster revenue growth and maintain robust profit margins, typically above 20%.
With these promising numbers, QCOM is an AI stock one should not miss out on.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
