Here's Why Qualcomm Is Still Overlooked vs. Nvidia and Intel

Qualcomm (NASDAQ: QCOM) has been overlooked arsenic request for Nvidia and Intel's information halfway chips takes the spotlight. Nvidia is up astir 11% twelvemonth to date, portion Intel has astir tripled successful value. Qualcomm banal is somewhat down astatine the clip of writing, but it could beryllium the astir compelling bargain close now.

Memory shortages person pressured gross successful its handset business, weighing connected the stock. However, Qualcomm expects its modulation to a diversified edge-to-cloud infrastructure person to much than treble its gross to $100 cardinal by 2029, with net per stock exceeding $18. This is the accidental that Wall Street is overlooking.

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Expanding the addressable marketplace

The company's first-quarter net results amusement a concern successful transition. Total gross fell 3% twelvemonth implicit twelvemonth to $10.6 billion, portion adjusted (non-GAAP) net fell 7% to $2.65. These declines mostly bespeak anemic request successful the handset business, but the existent communicative was that non-handset segments reported a combined 20% summation successful revenue.

The non-handset maturation shows that the displacement distant from a mobile-focused chips concern is already driving results. Automotive gross grew 38% twelvemonth implicit year. Qualcomm has $65 cardinal successful plan wins successful the pipeline for this segment. It expects to exit the existent fiscal twelvemonth with $6 cardinal successful annualized car revenue.

At its caller capitalist day, absorption raised its fiscal 2029 outlook, calling for non-handset gross to deed $40 billion. One of the main catalysts for this is the accidental to standard its Dragonfly level for information halfway infrastructure solutions. Revenue from its information halfway concern is expected to scope astir $5 cardinal by fiscal 2027 and $15 cardinal by fiscal 2029.

Why Qualcomm tin win

There are risks arsenic Qualcomm goes aft this opportunity. This modulation volition enactment it successful contention with Nvidia, whose graphics processing units (GPUs) person been wide deployed successful information centers worldwide. Qualcomm's Dragonfly level aims to plan information centers astir assorted types of processing units to easiness the representation bottleneck, peculiarly successful artificial quality (AI) inference workloads.

However, Qualcomm has its ain advantages. It has decades of acquisition designing high-performance, low-power computing solutions for the mobile market, which it tin use to automotive, information centers, and borderline AI (robotics). Its acquisition of spot bundle startup Modular adds an important furniture to the stack, making it easier for customers to tally AI crossed antithetic hardware and platforms.