Source: Investing Published 11/20/2024, 01:07
Qualcomm (NASDAQ: QCOM), a leader in connected computing, has announced its strategy to target a total expanded market (TAM) of approximately $900 billion by 2030. The company made the move to focus on diversification and its leading technology roadmap, which it unveiled during its Investor Day 2024.
The company is poised to capitalize on the growing demand for connected edge devices.
forecasting more than 50 billion cumulative shipments from this year through 2030. Cristiano Amon, President and CEO of Qualcomm, emphasized the company’s growth potential and the role of generative AI in driving demand across various industries, positioning Qualcomm to capitalize on this significant market opportunity.
Qualcomm has set new five-year financial targets for its QCT business, targeting combined revenue of $22 billion by fiscal year 2029. This includes an $8 billion revenue target in automotive, $14 billion in Internet of Things (IoT).
and significant growth in the PC, Industrial, and Extended Reality (XR) segments.
each of which is expected to reach $4 billion in revenue by fiscal year 2029.
with the rest of the IoT segment contributing the same number.
Company leadership, including CFO and COO Akash Palkhiwala and other senior executives, outlined diversification opportunities during the event. They highlighted Qualcomm’s appeal across various markets and potential for further expansion.
Qualcomm’s plans reflect its continued innovation in intelligent computing and its nearly 40-year history of setting industry standards. The company’s Snapdragon platforms are known for powering exceptional consumer experiences.
and it has a significant patent portfolio under its licensing business, QTL.
Qualcomm’s forward-looking statements are subject to risks and uncertainties, including factors such as customer concentration, vertical integration by customers, geopolitical tensions, and the ability to expand technologies into new product areas and industries. These factors could materially affect the company’s actual results compared to its expectations.
This news article is based on a press release from Qualcomm. The information provided reflects the company’s current expectations and market opportunities as outlined during its investor day.
In other recent news, Qualcomm reported strong fourth-quarter and fiscal 2024 results, with non-GAAP revenue of $10.2 billion and earnings per share of $2.69. The chip segment contributed $8.7 billion in revenue, while the licensing segment brought in $1.5 billion. Qualcomm’s position in the automotive market was underscored by record revenue of $899 million.
a significant year-over-year increase. The company returned $2.2 billion to shareholders through buybacks and dividends, with revenue forecasts for the first quarter of fiscal 2025 between $10.5 billion and $11.3 billion.
Loop Capital initiated coverage of Qualcomm shares, with a “hold” rating and a $180 price target. The firm highlighted the need for Qualcomm to diversify its revenue streams, given challenges such as Apple’s shift toward its own core modem technology and the maturing smartphone market. Qualcomm has made progress in diversifying its revenue streams, particularly through expanding into the automotive sector.
which now accounts for a high single-digit percentage of the company’s total revenue.
Diversifying into markets including the Internet of Things, automotive, and extended reality has positioned the company for continued growth. However, Qualcomm expects share to decline by 2026 due to the potential internal migration of a major customer. Here are the latest developments from Qualcomm.
InvestingPro Insights
Several key financial indicators and analyst insights support Qualcomm’s ambitious strategy to target a $900 billion market by 2030. According to InvestingPro data, Qualcomm’s revenue growth has been strong, with an increase of 18.69% in the most recent quarter. This growth trajectory is well in line with the company’s expansionary market goals.
InvestingPro’s advice suggests that Qualcomm is trading at a relatively low price-to-earnings ratio relative to its near-term earnings growth.
with a current ratio of 18.11. This suggests that the stock may be undervalued given its growth prospects. Additionally, the company’s PEG ratio of 0.46 also supports this view, suggesting that Qualcomm’s stock price may not fully reflect its expected earnings growth.
The company’s financial health appears to be strong, with InvestingPro data showing that liquid assets exceed short-term liabilities.
and the company operates with a moderate level of debt. This financial stability provides Qualcomm with the flexibility to invest in new markets it targets.
particularly in the automotive and IoT sectors.
Qualcomm’s dividend policy also stands out.
with InvestingPro’s advice noting that the company has raised its dividend for 22 consecutive years. The current dividend yield of 2.07% could attract income-focused investors as the company pursues its growth strategy.
It’s worth noting that 19 analysts have revised their earnings forecasts for the coming period, indicating growing confidence in Qualcomm’s near-term performance. This positive sentiment is in line with the company’s ambitious revenue targets across various sectors.
For investors seeking a deeper understanding of Qualcomm’s potential, InvestingPro offers 11 additional tips that can provide valuable insights into the company’s prospects as it aims to
Benefit from the expanding connected edge device market.
