Qualcomm: An AI Chip Investment Opportunity
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 11 2026
0mins
Should l Buy QCOM?
Source: Fool
- Market Outlook: Despite Qualcomm (QCOM) facing a 3.5% year-over-year revenue decline due to smartphone volume pressures, its rapid growth in the automotive and Internet of Things (IoT) sectors is expected to provide new revenue streams, alleviating short-term financial strain.
- Memory Chip Supply Constraints: The surge in demand for AI computing has led to rising memory chip prices, putting pressure on Qualcomm's revenue, a trend expected to persist until the end of 2026, impacting its fiscal 2027 performance.
- Long-Term Growth Potential: Qualcomm's strategic positioning in AI inference, particularly with its Snapdragon mobile processors, suggests a significant increase in demand as AI inference shifts from data centers to devices, driving substantial growth in the coming years.
- Investment Timing: With shares currently priced below $140 and a price-to-earnings ratio of just 12, despite facing short-term challenges, Qualcomm's long-term potential remains strong, presenting a compelling buying opportunity for patient investors.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy QCOM?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on QCOM
Wall Street analysts forecast QCOM stock price to rise
16 Analyst Rating
10 Buy
5 Hold
1 Sell
Moderate Buy
Current: 142.630
Low
165.00
Averages
197.14
High
225.00
Current: 142.630
Low
165.00
Averages
197.14
High
225.00
About QCOM
Qualcomm Incorporated is engaged in the development and commercialization of foundational technologies for the wireless industry, including third generation (3G), fourth generation (4G) and fifth generation (5G) wireless connectivity, and high-performance and low-power computing, including on-device artificial intelligence. Its segments include Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL) and Qualcomm Strategic Initiatives. QCT develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies, including radio frequency front-end, digital cockpit and advanced driver assistance and automated driving, Internet of things including consumer electronic devices, industrial devices and edge networking products. QTL grants licenses or otherwise provides rights to use portions of its intellectual property portfolio that includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Qualcomm Stock Attracts Investors Amid Discount
- Earnings Warning: Qualcomm's fiscal Q1 2026 sales grew only 5% year-over-year, surpassing analyst expectations, yet management's guidance of $10.2 to $11 billion for the current quarter falls short of the $11.1 billion consensus, indicating significant market pressures.
- Market Opportunity: Despite facing challenges from memory chip shortages in the short term, Qualcomm's Snapdragon microprocessors are increasingly being adopted in AI-capable laptops and wearables, with 2026 poised to be a breakout year for edge computing, driving future growth.
- Technological Outlook: The CEO highlighted that 2026 will present a major opportunity for edge computing, as AI data centers encounter capacity constraints, making Qualcomm's processors a crucial choice for the AI industry due to their processing efficiency and superior memory bandwidth.
- Investor Confidence: Although the memory shortage remains a concern, analysts believe that Qualcomm's stock price has already absorbed most negative news, suggesting that investors may sense a market recovery before the supply issues are resolved, reflecting confidence in future growth.
See More
US Stock Markets Rise on Strong Economic Data
- Strong Economic Data: US December capital goods new orders rose 0.6% month-over-month, surpassing expectations of 0.3%, indicating a rebound in capital spending and boosting market confidence in economic recovery.
- Housing Market Recovery: December housing starts increased by 6.2% month-over-month to 1.404 million, significantly exceeding expectations of 1.304 million, suggesting a revival in the real estate market that could drive growth in related sectors.
- Manufacturing Production Growth: January manufacturing production rose 0.6% month-over-month, beating expectations of 0.4%, marking the largest increase in 11 months, which indicates a recovery momentum in manufacturing that may further propel economic growth.
- Optimistic Corporate Earnings: Over 75% of S&P 500 companies reported earnings that exceeded expectations, with Q4 earnings growth projected at 8.4%, which will further boost market sentiment and attract investor interest.
See More
UK Consumers' Association Withdraws Lawsuit Against Qualcomm
- Lawsuit Withdrawal: The UK's Consumers' Association, Which?, announced the withdrawal of its lawsuit against Qualcomm, which accused the company of abusing its dominant position to force Apple and Samsung to pay inflated royalties, indicating the case's weak legal foundation.
- Consumer Impact: Representing 29 million UK consumers, Which? sought over £480 million in reimbursement for inflated prices due to alleged anticompetitive practices, but ultimately did not secure any compensation.
- Legal Findings: Following the trial, Which? concluded that Qualcomm's practices did not infringe competition laws or lead to increased royalties, affirming that Qualcomm's licensing requirements are lawful and do not harm competition.
- Market Reaction: A Qualcomm spokesperson stated that the withdrawal reaffirms U.S. court rulings on the legality of its licensing practices, although market sentiment remains cautious regarding Qualcomm's future performance, reflecting investor concerns about the company's outlook.
See More
Three Resilient Stocks to Consider
- Qualcomm's Market Performance: Qualcomm (QCOM) has seen a 23% decline in its stock price since early January; however, despite challenges from memory chip shortages, demand for its high-performance processors remains strong, and as memory manufacturers recover, Qualcomm is expected to increase shipments, improving market performance.
- Remitly's Growth Potential: Remitly Global (RELY) successfully facilitated $19.5 billion in transfers in Q3 last year, a 35% year-over-year increase, generating $419.5 million in revenue with EBITDA of $61.2 million, up 29%, and analysts expect this growth momentum to continue through 2028, showcasing its strong competitive position in the international payments market.
- The Trade Desk's Value Recovery: The Trade Desk (TTD) has been impacted by the overall market downturn, but its revenue is projected to grow by 16% in 2023, with a current P/E ratio of only 12 times, indicating investment value, as the market has yet to recognize its necessity.
- Market Environment Challenges: While the overall market faces uncertainty, stocks like Qualcomm, Remitly, and The Trade Desk demonstrate strong resilience, suggesting that investors may consider these potential stocks for long-term gains amid market volatility.
See More
Cisco Shares Plunge Due to Rising Memory Prices
- Significant Stock Drop: Cisco shares plummeted by as much as 12% on Thursday, marking the worst single-day decline since 2022, primarily due to rising memory prices exerting pressure on the company's margins, reflecting market concerns about its future profitability.
- Memory Shortage Impact: The global memory shortage, driven by strong demand for AI chips from Nvidia, poses challenges for Cisco as production costs soar, particularly with large data center memory orders limiting the production capacity for other devices, further exacerbating market uncertainty.
- Lackluster Financial Outlook: Although Cisco reported better-than-expected quarterly results, the stock still dropped about 7% due to the company issuing a mediocre forecast, indicating insufficient investor confidence in future growth prospects.
- Strategic Response Adjustments: CEO Chuck Robbins stated that Cisco will respond to rising memory prices by raising prices, revising contracts, and renegotiating terms, while CFO Mark Patterson emphasized controlling what can be controlled to mitigate cost pressures.
See More
Cisco Shares Plunge 12% Amid Margin Pressure from Rising Memory Prices
- Stock Plunge: Cisco shares fell 12% on Thursday, marking the largest single-day drop in four years, primarily due to rising memory prices exerting pressure on the company's margins, reflecting market concerns about its future profitability.
- Memory Shortage Impact: The global shortage of memory, driven by strong demand for AI chips, has skyrocketed component costs, affecting Cisco and other tech companies, including Apple and Dell, which are also feeling the pinch from increased expenses.
- Financial Response: CEO Chuck Robbins stated during the earnings call that Cisco will raise prices, revise contracts, and negotiate terms to adapt to evolving component prices, aiming to control what can be managed amid rising costs.
- Declining Gross Margin: Although Cisco reported better-than-expected quarterly results, its product gross margin fell to 66.4%, down 130 basis points from the previous year, highlighting the challenges the company faces in managing rising costs.
See More
Qualcomm Stock Attracts Investors Amid Discount
- Earnings Warning: Qualcomm's fiscal Q1 2026 sales grew only 5% year-over-year, surpassing analyst expectations, yet management's guidance of $10.2 to $11 billion for the current quarter falls short of the $11.1 billion consensus, indicating significant market pressures.
- Market Opportunity: Despite facing challenges from memory chip shortages in the short term, Qualcomm's Snapdragon microprocessors are increasingly being adopted in AI-capable laptops and wearables, with 2026 poised to be a breakout year for edge computing, driving future growth.
- Technological Outlook: The CEO highlighted that 2026 will present a major opportunity for edge computing, as AI data centers encounter capacity constraints, making Qualcomm's processors a crucial choice for the AI industry due to their processing efficiency and superior memory bandwidth.
- Investor Confidence: Although the memory shortage remains a concern, analysts believe that Qualcomm's stock price has already absorbed most negative news, suggesting that investors may sense a market recovery before the supply issues are resolved, reflecting confidence in future growth.
See More
US Stock Markets Rise on Strong Economic Data
- Strong Economic Data: US December capital goods new orders rose 0.6% month-over-month, surpassing expectations of 0.3%, indicating a rebound in capital spending and boosting market confidence in economic recovery.
- Housing Market Recovery: December housing starts increased by 6.2% month-over-month to 1.404 million, significantly exceeding expectations of 1.304 million, suggesting a revival in the real estate market that could drive growth in related sectors.
- Manufacturing Production Growth: January manufacturing production rose 0.6% month-over-month, beating expectations of 0.4%, marking the largest increase in 11 months, which indicates a recovery momentum in manufacturing that may further propel economic growth.
- Optimistic Corporate Earnings: Over 75% of S&P 500 companies reported earnings that exceeded expectations, with Q4 earnings growth projected at 8.4%, which will further boost market sentiment and attract investor interest.
See More
UK Consumers' Association Withdraws Lawsuit Against Qualcomm
- Lawsuit Withdrawal: The UK's Consumers' Association, Which?, announced the withdrawal of its lawsuit against Qualcomm, which accused the company of abusing its dominant position to force Apple and Samsung to pay inflated royalties, indicating the case's weak legal foundation.
- Consumer Impact: Representing 29 million UK consumers, Which? sought over £480 million in reimbursement for inflated prices due to alleged anticompetitive practices, but ultimately did not secure any compensation.
- Legal Findings: Following the trial, Which? concluded that Qualcomm's practices did not infringe competition laws or lead to increased royalties, affirming that Qualcomm's licensing requirements are lawful and do not harm competition.
- Market Reaction: A Qualcomm spokesperson stated that the withdrawal reaffirms U.S. court rulings on the legality of its licensing practices, although market sentiment remains cautious regarding Qualcomm's future performance, reflecting investor concerns about the company's outlook.
See More
Three Resilient Stocks to Consider
- Qualcomm's Market Performance: Qualcomm (QCOM) has seen a 23% decline in its stock price since early January; however, despite challenges from memory chip shortages, demand for its high-performance processors remains strong, and as memory manufacturers recover, Qualcomm is expected to increase shipments, improving market performance.
- Remitly's Growth Potential: Remitly Global (RELY) successfully facilitated $19.5 billion in transfers in Q3 last year, a 35% year-over-year increase, generating $419.5 million in revenue with EBITDA of $61.2 million, up 29%, and analysts expect this growth momentum to continue through 2028, showcasing its strong competitive position in the international payments market.
- The Trade Desk's Value Recovery: The Trade Desk (TTD) has been impacted by the overall market downturn, but its revenue is projected to grow by 16% in 2023, with a current P/E ratio of only 12 times, indicating investment value, as the market has yet to recognize its necessity.
- Market Environment Challenges: While the overall market faces uncertainty, stocks like Qualcomm, Remitly, and The Trade Desk demonstrate strong resilience, suggesting that investors may consider these potential stocks for long-term gains amid market volatility.
See More
Cisco Shares Plunge Due to Rising Memory Prices
- Significant Stock Drop: Cisco shares plummeted by as much as 12% on Thursday, marking the worst single-day decline since 2022, primarily due to rising memory prices exerting pressure on the company's margins, reflecting market concerns about its future profitability.
- Memory Shortage Impact: The global memory shortage, driven by strong demand for AI chips from Nvidia, poses challenges for Cisco as production costs soar, particularly with large data center memory orders limiting the production capacity for other devices, further exacerbating market uncertainty.
- Lackluster Financial Outlook: Although Cisco reported better-than-expected quarterly results, the stock still dropped about 7% due to the company issuing a mediocre forecast, indicating insufficient investor confidence in future growth prospects.
- Strategic Response Adjustments: CEO Chuck Robbins stated that Cisco will respond to rising memory prices by raising prices, revising contracts, and renegotiating terms, while CFO Mark Patterson emphasized controlling what can be controlled to mitigate cost pressures.
See More
Cisco Shares Plunge 12% Amid Margin Pressure from Rising Memory Prices
- Stock Plunge: Cisco shares fell 12% on Thursday, marking the largest single-day drop in four years, primarily due to rising memory prices exerting pressure on the company's margins, reflecting market concerns about its future profitability.
- Memory Shortage Impact: The global shortage of memory, driven by strong demand for AI chips, has skyrocketed component costs, affecting Cisco and other tech companies, including Apple and Dell, which are also feeling the pinch from increased expenses.
- Financial Response: CEO Chuck Robbins stated during the earnings call that Cisco will raise prices, revise contracts, and negotiate terms to adapt to evolving component prices, aiming to control what can be managed amid rising costs.
- Declining Gross Margin: Although Cisco reported better-than-expected quarterly results, its product gross margin fell to 66.4%, down 130 basis points from the previous year, highlighting the challenges the company faces in managing rising costs.
See More
