We came across a bullish thesis on QUALCOMM Incorporated (QCOM) on Value Investing Subreddit Page by Straight_Violinist_5. In this article, we will summarize the bulls’ thesis on QCOM. QUALCOMM Incorporated (QCOM)'s share was trading at $170.29 as of Feb 12^th. QCOM’s trailing and forward P/E were 18.37 and 14.90 respectively according to Yahoo Finance.

Qualcomm (QCOM), currently trading around $171.36, is approximately 25% below its 52-week high, with a P/E ratio of 18, indicating the market may be undervaluing the company’s potential. Despite mobile still accounting for around 75% of its revenue, Qualcomm’s strong fundamentals and impressive R&D capabilities suggest room for growth in new, high-potential areas such as robotics chips. As the robotics market is expected to see rapid growth due to the increasing adoption of automation in industries like manufacturing, logistics, and service, Qualcomm is well-positioned to capitalize on this trend. The company’s advanced semiconductor designs, particularly its custom “Oryon” cores found in the Snapdragon X Elite and Snapdragon 8 Elite, offer superior performance and energy efficiency, key features needed for real-time decision-making in robotics applications.

Qualcomm’s Q1 performance underscores its solid financial health, with $11.67 billion in sales and adjusted profits of $3.41 per share, providing the company with robust cash flow. This financial strength, combined with a 2% dividend, supports its investments in emerging sectors such as automotive, IoT, and robotics. The company’s strategic push to diversify away from its core mobile market and into robotics chips could open up a significant new revenue stream, further reducing its reliance on smartphones.

For value investors, Qualcomm presents an attractive entry point, with its current discount and strong balance sheet enhancing the appeal. The company’s expertise in technology and its successful track record in capturing emerging markets suggest it is well-positioned to capitalize on the growing robotics sector. While there are always risks associated with entering new markets, Qualcomm’s established capabilities make it a strong candidate for long-term growth, offering compelling upside potential.

QUALCOMM Incorporated (QCOM) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 74 hedge fund portfolios held QCOM at the end of the third quarter which was 100 in the previous quarter. While we acknowledge the risk and potential of QCOM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than QCOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.