Prediction: This Chip Stock Could Be a Sleeper AI Winner
Prediction: This Chip Stock Could Be a Sleeper AI Winner
Vandita JadejaFri, October 23, 2026 at 2:00 PM UTC
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Quality Stock Arts / Shutterstock.com (Quality Stock Arts / Shutterstock.com)Quick Read -
QCOM trades at 18x forward earnings while management targets $40B in non-handset revenue by 2029, earning a BUY rating with a $219 price target.
Amazon's data center AI collaboration and a renewed Apple patent license signal QCOM is diversifying well beyond handsets into hyperscaler silicon.
QCOM trades at nearly Broadcom's 20x forward multiple despite posting -4% revenue growth versus AVGO's 85%, and that gap can only close if data center revenue delivers.
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The 24/7 Wall St. price target for Qualcomm (NASDAQ:QCOM) is $218.99. That means 24.7% upside from the current $175.66. Our model rates the stock a buy with high confidence.
QCOM Price Target — 24/7 Wall St.24/7 Wall St. Price Target Summary
Metric
Value
Current Price
$175.66
24/7 Wall St. Price Target
$218.99
Upside/Downside
24.7%
Recommendation
Confidence Level
90%
The market still prices Qualcomm like a handset supplier in a down cycle, even as its AI business builds in the background.
In fiscal Q3, automotive revenue rose 61% year over year. Two hyperscaler custom silicon wins start producing revenue in the December quarter, and management now targets $40B in non-handset revenue by fiscal 2029.
On our forward EPS estimate of $9.8028, shares trade at about 18x. That multiple gives Qualcomm little credit for the shift.
QCOM Price Scenario — 24/7 Wall St.Handset Slump Masks a 61% Automotive Surge
Qualcomm is up 0.71% over the past week, down 1.16% over the past month, and up 4.32% year to date. Shares sit 31.8% below the 52-week high of $257.56 and 45.3% above the low of $120.88.
Fiscal Q3 revenue of $9.95B beat the $9.67B estimate. Non-GAAP EPS came in at $2.21, just missing expectations of $2.22. Handsets fell 20%, while IoT grew 9%.
Since that report, Qualcomm has announced a multi-generational AI data center collaboration with Amazon (NASDAQ:AMZN), renewed its global patent license with Apple (NASDAQ:AAPL), and won a trial verdict on October 13. CNBC reported Qualcomm plans performance-focused job cuts worldwide.
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Why Bulls See $238 and Beyond
Our bull case reaches $238.29. Data center is the main swing factor. Management projects $5 billion in data center revenue in fiscal 2027 and $15 billion by fiscal 2029. HBC Gen 1 has completed tape-out, and the first solution is targeted for mid-2027.
In automotive, Qualcomm expects an annualized run rate of about $7 billion ending fiscal 2026. It also won BMW's lead compute role for ADAS and digital cockpit.
CEO Cristiano Amon expects non-handset growth to accelerate "from 24% in fiscal 2026 to greater than 60% in fiscal 2027." Among Wall Street analysts, 2 rate the stock a strong buy and 9 rate it a buy.
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QCOM Analyst Ratings — 24/7 Wall St.Apple Step-Down and Memory Costs Could Cap Gains
The bear case stands at $185.93. The CFO expects Apple product revenue to fall about 50% from the September quarter to the December quarter.
He also put the EPS hit from Android weakness at greater than $1.50. Higher memory and wafer costs helped drive operating income down 41.13%, and early custom-chip revenue could reduce QCT gross margin by one and a half to 2%.
Analysts reflect the caution: 23 rate the stock a hold. There are offsets. Management is pushing through double-digit price increases to restore margins, and the stock still offers a 6.92% free cash flow yield.
Qualcomm Trades Like Broadcom Without Broadcom's Growth Yet
Broadcom (NASDAQ:AVGO) leads the hyperscaler custom ASIC market Qualcomm is now entering. It trades at nearly the same forward multiple while growing quarterly revenue 85.5%.
NVIDIA (NASDAQ:NVDA) is the benchmark for AI inference, and its forward multiple stands at a clear premium.
On consensus numbers, Qualcomm already trades near Broadcom's multiple, so the comparison works only if data center revenue grows as planned. If it does, the peer group makes our target look reasonable and potentially conservative.
Company
Forward P/E
Quarterly Revenue Growth YoY
Qualcomm
20x
-4%
Broadcom
19x
85.5%
25x
105.9%
December Quarter Data Center Revenue Tips the Scale
The 24/7 Wall St. price target of $218.99 carries a buy rating at 90% confidence. I'd find the upside compelling if hyperscaler revenue shows up on schedule and the price increases lift margins.
I'd be more conservative if the Apple decline exceeds non-handset growth in fiscal 2027. For now, the data center growth is the key variable to monitor.
Looking further out, here is where our model projects Qualcomm could trade, assuming current growth trends and market conditions hold.
Year
24/7 Wall St. Price Target
2026
$182.69
2027
$218.99
2028
$259.18
2029
$283.19
2030
$316.37
The projections depend on Qualcomm continuing to execute its diversification plan. Results could land well above or below them depending on how quickly the data center business grows and how handset demand holds up.
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Source: “AOL Money”
