Wall Street analysts liked Qualcomm’s results, but concerns about growth are emerging

Despite beating expectations, Qualcomm’s left many analysts worried about the company’s growth path going forward. Qualcomm posted financial results for its fiscal first quarter that beat estimates. The chipmaker reported adjusted earnings per share of $3.41 on $11.67 billion in revenue. Analysts polled by LSEG expected $2.96 a share on $10.93 billion in revenue. All three of the company’s major end markets for its chips grew during the period. Qualcomm’s most important market, mobile handsets, grew 13% on an annual basis, while analysts surveyed by FactSet were looking for about 5% growth. The company sees handset revenues growing by 10% in 2025. However, Qualcomm’s stock shed nearly 5% during premarket trading Thursday as the company said it expects slower growth from its QCT segment, estimating second-quarter revenue from the business to be in between $8.9 billion to $9.5 billion. QCT, which includes sales from physical chips, rose by a record 20% to $10.1 billion in sales for the quarter just reported. Many analysts signaled worries of Qualcomm’s future prospect, saying the company could be negatively impacted by tech company Huawei’s resurgence in China and lose revenue as Apple moves to launch its in-house modem chip — replacing Qualcomm semiconductors. Here’s what analysts had to say: Morgan Stanley keeps equal weight rating, $204 price target Analyst Joseph Moore noted “solid chipset growth in smartphone and diversification markets” but sees Huawei’s dominance in China as a headwind for Qualcomm as its key customers lose market share. He also modeled for a modest decline in the Qualcomm’s automotive business ahead. His price target signals 16% upside. “We are impressed by Qualcomm’s ability to maintain growth in a challenging smartphone environment, and are excited about content gains with the edge AI theme. In addition, their growing autos opportunity is exciting and their share gains are notable. That being said, we see long-term handset risk with losing the Apple baseband and worry about Samsung concentration. We remain EW as the possibility of this caps the multiple potential, but we do admire the company’s execution thus far.” Citi reiterates neutral rating and $185 price target Citi said Apple’s transition to internal modems will hit Qualcomm’s earnings. A handset upgrade cycle from Qualcomm is at least a year away, the firm added. The bank’s price target points to 5% upside ahead. “Yesterday after the close, QCOM reported good results driven by strength from the handset market (65% of F1Q25 sales) but guided for a 9% QoQ decline as Apple is starting to go away and we believe it will result in a $1.2 billion revenue headwind in C25. We raise estimates but maintain our Neutral rating given Apple’s transition will pressure Qualcomm EPS.” Wells Fargo reiterates underweight rating and $175 price target Wells Fargo analyst Aaron Rakers is watching Qualcomm’s handset guidance for the second quarter. His price target is just below where shares closed Wednesday. “QCOM noted that the guided q/q decline in QCT handset revenue (down ~10% q/q) reflects seasonality + lower ship to Apple. As a reminder, Apple is expected to launch its iPhone SE 4 in March – we see QCOM’s comments as confirming that the iPhone SE 4 will utilize Apple’s internally designed modem; leaving us / investors to become increasing focused on QCOM’s loss of Apple handset revenue going forward … QCOM dismissed concerns that near-term handset demand strength was driven by pre-tariff pull-forward.” JPMorgan maintains overweight rating, cuts price target Analyst Samik Chatterjee lowered his price target by $5 to $195, which suggests 10.9% potential upside. Qualcomm is “executing well in its own right” within all sides of its business, including handsets, autos as well as internet of things, but investors remain concerned about factors outside of the company’s control, he said. “With the overhang in relation to concern relative to share loss at Apple, investors are likely to be circumspect around the lower visibility into upsides. From a longer-term perspective, however, Qualcomm’s share gain in Samsung’s flagships while delivering upsides in both IOT and Autos continues to reinforce technology leadership that Qualcomm has across its diverse end-markets and its leverage to benefit from the Edge AI adoption cycle, which we expect to drive a re-rating once the company cycles past the near-term headwinds from extraneous factors outlined above.” Bank of America reiterates buy rating and keeps $245 price target Analyst Tal Llani is among Wall Street’s most bullish on Qualcomm, as his $245 price target implies more than 39% upside. The chipmaker is a “long-term beneficiary” of growing 3G/4G/5G technologies and QCT shipments should benefit from smartphone upgrades, he said. “Qualcomm delivered strong results … Some aspects of demand might not be sustainable, especially the China strength and impact of Samsung share gains, however, the results attest to Qualcomm’s ability to lead with smartphone technologies and diversify its portfolio into Automotive and Compute.”