Qualcomm earned $215 target from BofA: Here’s what could derail it

Bank of America is betting connected Qualcomm's momentum by raising its terms people from $200 to $215 and maintaining its bargain rating.

The expert stated that Qualcomm recorded a “strong 4th with revenues up 10% vs Street's 5.1%, driven by 13.2% QCT maturation vs Street's 7.7%.”

The expert enactment said that:

QCT maturation came from each segments, with Handsets, Auto, and IoT up 14.2%, 17.1%, and 7.4%, respectively.

Bank of America said that Qualcomm’s “intermediate word looks somewhat challenged with unsustainable handset trends, and we expect spot to dilatory successful 2Q26.”

That blend of powerfulness and prudence perfectly describes the company's contiguous situation. Strong maturation successful the automotive and IoT markets shows that Qualcomm is expanding extracurricular smartphones, but the slope argues that the company's QCT gross inactive comes from handsets, which whitethorn person already peaked for the cycle.

The connection for investors is clear: Qualcomm's AI-driven diversification is genuine, but the emergence successful handsets that helped it surpass expectations whitethorn not endure. Bank of America's $215 terms people means determination is inactive country for growth, arsenic agelong arsenic the chipmaker tin support moving toward automobiles, IoT, and caller data-center prospects.

Bank of America's affirmative telephone was based connected a cleanable bushed successful astir each operational line. Qualcomm's QCT division, which encompasses cellphones, cars, and the Internet of Things, did amended than expected successful each area.

Here’s however the 4th stacked up:

• Total revenue:+10% twelvemonth implicit twelvemonth versus Street’s +5.1%

• QCT segment: +13.2% vs. Street’s +7.7%

• Handsets: +14.2%

• Automotive: +17.1% connected integer chassis demand

• IoT: +7.4% connected connected instrumentality adoption

• Operating margin: 33.8%, astir 20 ground points beneath Street expectations

• Earnings per share: 12 cents supra consensus

• Valuation shift: Model rolled to FY27E, aggregate accrued to 17x from 15x FY26E

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The findings were "strong QCT results crossed each segments," analysts said, indicating that the spot was evenly distributed passim each its merchandise lines, alternatively than concentrated successful conscionable one.

BofA's caller exemplary present expects Auto and IoT to lend much successful the agelong term, which helps offset what it views arsenic a transitory emergence successful smartphone sales.

Bank of America's affirmative outlook for Qualcomm comes with a wide asterisk: the emergence successful cellphone income is cyclical, not structural.

Smartphone request successful China was the main operator of the quarter, acknowledgment to vacation releases of Android phones and a inclination toward higher-end models. That premix alteration helped QCT grow by treble digits, but it astir apt won't hap again erstwhile seasonal influences deterioration retired successful aboriginal 2026.