QCOM Should I Buy
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Qualcomm Inc (QCOM) is not a strong buy at the moment for a beginner investor with a long-term focus. While the company is making efforts to diversify its revenue streams, it faces significant headwinds in its core smartphone business, declining financial performance, and a lack of near-term catalysts. The technical indicators show some positive momentum, but the broader sentiment from analysts and hedge funds suggests caution. For a long-term investor, it may be better to wait for clearer signs of growth or stabilization in the company's fundamentals.
The MACD is positive and expanding, indicating bullish momentum. RSI is neutral at 79.303, and moving averages are converging, showing no strong directional trend. The stock is trading near its resistance level (R1: 134.186), which could act as a barrier for further upward movement.
The company is working on diversifying into automotive, PCs, and datacenters. Analysts see potential in Qualcomm's data center strategy and AI inference market, which could drive future growth.
Significant headwinds in the smartphone business, including declining shipments and loss of Apple as a key customer. Analysts have downgraded the stock, citing weak fundamentals and lack of near-term catalysts. Hedge funds are selling, with a 195.24% increase in selling activity over the last quarter.
In Q1 2026, revenue increased by 5.00% YoY to $12.25 billion. However, net income dropped by -5.53% YoY to $3.004 billion, EPS fell by -1.77% YoY to 2.78, and gross margin decreased by -2.19% YoY to 54.55%. These figures indicate declining profitability despite revenue growth.
Recent analyst ratings are predominantly negative. JPMorgan downgraded the stock to Neutral with a price target of $140, citing downside risks in the handset business. Goldman Sachs initiated coverage with a Neutral rating and a $135 price target, highlighting challenges in diversification. Other firms like Bernstein, Seaport Research, and BofA have also downgraded the stock, pointing to weak smartphone demand and risks from the expiration of the Apple license agreement.
