Qualcomm: A Risky Outlook for Investors

Qualcomm's Difficult Situation

QUALCOMM Incorporated stock was trading at $169.20 as of September 26. The company’s trailing and forward price-to-earnings ratios were determined to be 16.33 and 13.99, respectively.

Irrational Analysis emphasizes Qualcomm's continued weak performance in the semiconductor sector, linking it to strategic missteps and missed opportunities over the past decade. Although Qualcomm has historically led in mobile chipsets and licensing, its diversification efforts outside of mobile devices have largely been unsuccessful.

Attempts in Cloud AI forecasting, system-on-chip for laptops, RF front-end, 5G O-RAN, XR/AR/VR, and data center CPUs have either fallen short of expectations or been abandoned. The company has lost ground against competitors such as Intel, Nvidia, Broadcom, AMD, and MediaTek by frequently delaying the execution process.

The automotive segment stands out as a notable success story. This segment has rapidly increased revenues, surpassing Nvidia on a quarterly basis; however, it operates as a low-margin and regionally concentrated business. Qualcomm's efforts to shift its QTL patent portfolio towards new markets like continuously connected PCs, edge AI, and the Internet of Things have failed to create meaningful economic value.

On top of these issues, Qualcomm faces a structural challenge from Apple. Apple has successfully launched its own internal modem C1/C1X in the iPhone 16e and iPhone Air models, capturing an increasing share of iPhone sales. The expiration of the Qualcomm-Apple licensing agreement in April 2027 raises concerns about a significant revenue source at risk.

Qualcomm’s current reports diminish visibility in critical non-device and cloud initiatives, making it difficult to assess true revenue potential. Overall, Qualcomm finds itself increasingly constrained by strategic excesses, delayed diversification, and competitive pressures. This has led to a mismatch with the company’s high-growth artificial intelligence infrastructure and data center computing markets.

On the other hand, a bullish thesis published by Christopher Kirincic in May 2025 supported Qualcomm's diversification into automotive, edge AI, and the Internet of Things, backed by stable licensing revenues. Since the publication of that article, Qualcomm shares have gained approximately 11% in value.

However, Irrational Analysis presents a contrary viewpoint, emphasizing strategic missteps and the impending revenue risks associated with Apple. QUALCOMM Incorporated has fallen outside the list of the 30 most popular stocks among hedge funds. According to our data, by the end of the second quarter, 76 hedge fund portfolios held QCOM; in the previous quarter, that number was 82. While acknowledging QCOM’s potential as an investment, we believe that certain AI stocks possess greater upside potential and carry less downside risk.