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Qualcomm has struggled in the midst of the coming loss of a large customer and heavy exposure to China.
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The emerging product lines of the company give investors a good reason to take advantage of the low valuation.
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10 shares that we like than Qualcomm ›
In recent years, investors have largely overlooked Qualcomm (Nasdaq: Qcom) stock. The leader in smartphone chip sets stood for a falling income after the 5G upgrade cycle and the course of his course, and the demand for AI-compatible phones has so far not promoted comparable growth cycle.
Plus, Apple is on schedule to drop Qualcomm as a chipset provider in 2027, and the heavy exposure of the company to China has weighed in the stock.
Despite those challenges, however, investors can overlook a compelling reason to buy these value shares. This is why.
In short, the reason to buy Qualcomm is the emerging business lines.
Indeed, struggles in the smartphone chipset activities can continue. However, Qualcomm has expected a day for smartphones to become less critical. It has been extended to new business lines, including IoT, Automotive and more recently, the PC business. It is also planning to design adapted processors that will integrate with Nvidia's Ai chips.
These movements show early signs of success. Although the turnover growth on an annual basis was 17% in the first half of the tax 2025 (ending on March 30), the IoT turnover grew by 31% in that period and the income from the car rose by 60%. This is far beyond the 12% increase in the hand set chip sale that still stimulates the most income from the company.
What is more, the costs and costs of Qualcomm grew at the levels that accurately approach sales growth. Nevertheless, the net income of $ 6 billion in the first two quarters of the tax 2025 increased by 18%, indicating that the company's chip companies are in an up cycle. Although Qualcomm has not reported numbers about its PC activities, it expects to generate $ 4 billion in annual income from that company per tax 2029.
Finally, despite the profit growth with double digits, Qualcomm shares with a P/E rat of 16. This indicates that investors have largely ignored the growth potential of this chip giant. With the rapid growth in the newer business lines of Qualcomm, however, investors may want to benefit from the low p/e ratio before more investors notice.
The expert analyst team of the Motley Fool, which is based on years of investment experience and deep analysis of thousands of shares, uses our own Moneyball AI investment database to bring top options to light. They just revealed them 10 best shares To buy now – Has Qualcomm made the list?
