Qualcomm Stock: Attractive Value Despite The Cyclical Downturn

Downturn in handset shipments is weighting on Qualcomm Inc. (NASDAQ:QCOM) to record a noticeable decrease in financials in the quarter ended March 2023, although the company met its own forecasts for revenue and net profit. The lower-than-expected recovery in China is frustrating the management, which forecasted a 9% decline in global smartphone sales in 2023 at best. Still, I believe the fundamental case of the company looks very attractive, due to the continued investments in technology leadership and active development of promising areas of chipsets for IoT and the automotive industry. I am rating QCOM with a Buy, thanks to a number of quality points. In particular, the company has a strong record of delivering high profitability numbers on a resilient basis; diversification efforts to shape a more favorable mix of offerings; synergy effect potential from 5G expansion and strong position to benefit from market and demand profile normalization.

Outlook and financial overview

The adoption of 5G technology is somewhat slowing down, but it remains a key long-term driver for Qualcomm. 

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