Qualcomm Incorporated QCOM recently took the market by storm with the launch of the Snapdragon X chip for mid-range AI (artificial intelligence) desktops and laptops. This SoC (system-on-chip) is the fourth such product in the Snapdragon X processor line, following the successful launch of the Snapdragon X Plus 8-core, Snapdragon X Plus and Snapdragon X Elite series.

Based on a 4-nanometer process, the Snapdragon X chip comprises an 8-core Oryon central processor, a graphics component and a neural processing unit (NPU). The NPU accelerates AI workloads, offering 45 TOPS (trillions of operations per second), making it an ideal platform to power Copilot+PCs – Microsoft Corporation’s MSFT vision of AI-first, flagship Windows hardware. These PCs with AI-powered tools and applications are set to be launched in the first quarter at around $600, making them an affordable option for the masses.

Snapdragon Series: QCOM’s Foray into AI Chips

AI PCs incorporate an additional processor designed specifically to accelerate AI capabilities. This specialized hardware enhances features like personal assistants and task automation. One of the significant selling points of AI PCs is their enhanced battery life. Qualcomm's chips, which are based on Arm Holdings Plc designs, promise extended use without frequent charging. 

Leveraging processors with multi-core CPUs with cutting-edge features, amazing graphics and worldwide network connectivity, Qualcomm Snapdragon mobile platforms are fast and have superb power efficiency. Smartphones and mobile devices built with Snapdragon mobile platforms enable immersive augmented reality and virtual reality experiences, brilliant camera capabilities, superior 4G LTE and 5G connectivity with state-of-the-art security solutions.

Qualcomm is currently focusing on a deeper foray into the realm of AI capabilities within the laptop and desktop business. The strategy is aimed at moving beyond the slowing smartphone industry, which is its primary breadwinner. In addition to diversifying its revenue stream, this is likely to extend QCOM’s AI footprint. The latest brand of AI chips is set to give a run for money to Intel Corporation’s INTC Core 5 120U processor, which is also used to power mid-range PCs. 

QCOM Rides on Solid EDGE Networking, Auto Business Traction

Qualcomm is increasingly focusing on the seamless transition from a wireless communications firm for the mobile industry to a connected processor company for the intelligent edge. The company is well-positioned to meet its long-term revenue targets driven by solid 5G traction, greater visibility and a diversified revenue stream.

Qualcomm is witnessing healthy traction in EDGE networking, which helps transform connectivity in cars, business enterprises, homes, smart factories, next-generation wearables and tablets. The company intends to harness AI to meet increased demands for essential products and services that are the building blocks of digital transformation in a cloud economy.

The automotive telematics and connectivity platforms, digital cockpit and C-V2X solutions are fueling emerging automotive industry trends such as the growth of connected vehicles, the transformation of the in-car experience and vehicle electrification. Qualcomm believes it is on track to become the largest smartphone radio frequency front-end supplier by revenue in the near future. Automotive revenues rose 68% to a record high of $899 million in fourth-quarter fiscal 2024, driven by increased content in new vehicle launches with its Snapdragon Digital Chassis platform. This was the 16th consecutive quarter in which Qualcomm recorded double-digit growth in automotive revenues.

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QCOM Stock Price Performance

Qualcomm shares have gained 15% over the past year compared with the wireless equipment industry’s growth of 29.5%. It has lagged Hewlett Packard Enterprise Company HPE and Broadcom Inc. AVGO — a couple of other major players in the industry.

QCOM Stock One-Year Price Performance

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Earnings Estimate Revision Trend for QCOM

Earnings estimates for Qualcomm for fiscal 2025 have moved up 7.6% to $11.14 over the past year, while the same for fiscal 2026 has jumped 8.8% to $12.30. The positive estimate revision depicts bullish sentiments for the stock.

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End Note

With solid fundamentals and healthy revenue-generating potential driven by robust demand trends for AI chips from Dell and Lenovo, Qualcomm appears to be a solid investment proposition. A strong emphasis on quality, diligent execution of operational plans and continuous portfolio enhancements are driving more value for customers. With improving earnings estimates, the stock is witnessing a positive investor perception. 

The stock delivered a trailing four-quarter average earnings surprise of 7.6%. It has a VGM Score of B. Qualcomm currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Riding on a robust earnings surprise history and favorable Zacks Rank, it appears primed for further price appreciation. Hence, investors are likely to profit if they bet on this high-flying stock now.

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