Qualcomm Stock Slips As New Growth Targets Fail To Impress Wall Street: Retail Divided

Shares of Qualcomm Inc. ($QCOM) tumbled more than 6% in mid-day trading on Wednesday after the company’s plans for new growth targets failed to impress analysts on Wall Street. 

During its first investor day since 2022, Qualcomm management took the stage to address concerns around increasing competition in the semiconductor industry, President-elect Donald Trump’s new administration, and potentially losing Apple Inc.’s ($AAPL) business. 

Qualcomm announced plans to significantly move beyond the smartphone segment and aims for 50% of its business exposure to be in segments other than smartphones by 2030. 

Currently, 64% of the company's revenue depends on the smartphone segment. 

With the product shift, Qualcomm anticipates it will generate $22 billion from segments such as laptops, automotive products, and other markets beyond the dominant smartphone segment over the next 5 years.

The division of its projected growth is as follows:

• Automotive: $8 billion
• PCs: $4 billion
• Industrial: $4 billion
• Extended reality: $2 billion
• Other Internet of Things (IoT): $4 billion

 

While Wall Street applauds Qualcomm’s intent to diversify, analysts have concerns around the company’s future look. 

Barclays, JPMorgan and Deutsche Bank are skeptical of Qualcomm’s IoT revenue targets, given the company is behind on its milestones outlined in 2021. 

“What will be picked at is IoT, where the CAGR is effectively flat since the last analyst day and the forecast is for over 2.5x over the next 5 years,” said Barclays in its research note. 

Bank of America (BofA) expressed optimism about Qualcomm’s long-term positioning but flagged uncertainties regarding the timeline for revenue contributions from new segments and the sustainability of near-term growth.

Deutsche Bank added that the potential loss of Apple’s business could pose a significant challenge. 

“We believe headwinds in the near-to-medium term from Apple’s share loss will likely weigh on investors' willingness to reward the long-term diversification benefits until the net gains become more apparent,” it said.

Bernstein pointed out that Qualcomm did not revise its automotive pipeline or targets, even though the company suggested potential upside over time. 

The brokerage also described the company’s Android outlook as "unambitious," given its emphasis on edge AI opportunities.

Qualcomm Inc. Sentiment and Message Volume on Nov 20 as of 1:30 p.m. ET | Source: Stocktwits

Retail sentiment on Stocktwits around Qualcomm remained ‘neutral’ during mid-day trading on Wednesday, even with an uptick in chatter to ‘high’. 

Some users on the platform feel the stock slide is because CEO Chrstiano Amon told Bloomberg that has no plans for any big acquisitions, shunning any rumors about buying out Intel ($INTC), in an interview after Investor Day. 

Amon also downplayed concerns about Qualcomm's business in China, despite the potential impact of proposed tariffs under Trump. 

China accounts for nearly half of the company's revenue, but Amon expressed confidence in Qualcomm's ability to navigate the challenges.

While Qualcomm’s shares have climbed 10% so far this year, investors and retail appear uncertain about its near-term future.