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Is Qualcomm Stock (QCOM) a Hidden Gem in Deep Value Territory?

Wed May 28, 2025
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Qualcomm (QCOM) stock has taken a beating, sliding more than 30% over the past year, weighed down by investor concerns over smartphone market slowdowns and geopolitical tensions impacting chip demand. Yet the company’s latest numbers tell a different story, showcasing robust growth, record revenues, and no signs of stalling. In fact, Qualcomm’s current valuation might be a screaming buy given its strong fundamentals and tailwinds in multiple sectors, hinting at serious upside for investors willing to look past the noise.

Qualcomm (QCOM) stock price history over the past twelve months

Qualcomm (QCOM) stock price history over the past twelve months

My analysis indicates QCOM is set for a strong recovery following a year of sideways trade.

Qualcomm’s dominance in 5G technology remains its primary growth driver. In its latest Q2 report, the company achieved $9.5 billion in revenue from its Qualcomm CDMA Technologies (QCT) segment, up 18% year-over-year, driven by its Snapdragon processors and 5G modem platforms like the X85. These chips power premium smartphones from brands like Xiaomi, which recently extended its multi-year deal with Qualcomm, ensuring its flagship devices use Snapdragon 8-series chips through at least 2030.

With global 5G connections projected to hit 2 billion by 2025, Qualcomm’s intellectual property and licensing arm (QTL) continues to vacuum in royalties, contributing $1.3 billion in Q2 alone.

Qualcomm (QCOM) estimated and reported revenues history

Qualcomm (QCOM) estimated and reported revenues history

Also, Qualcomm’s 5G technology is now making inroads beyond mobile devices, powering transformative applications in new sectors. The company has secured partnerships to integrate 5G into private networks for industrial automation, enabling real-time data processing for smart factories, as seen in collaborations with firms like Siemens (SIE). Moreover, its chips are now driving connectivity in smart city projects, with deployments in urban infrastructure expected to grow as global investments in smart cities reach $1.8 trillion by 2030.

Besides its core 5G offerings, Qualcomm’s diversification into automotive and IoT is paying off big time. In Q2, its automotive segment soared 59% year-over-year, generating notable revenue as carmakers adopt Snapdragon Digital Chassis for connected and autonomous vehicles.

Partnerships with major automakers, including contracts to supply chips for next-gen electric cars, are pretty interesting (and relevant to the valuation argument I will make later), as they show Qualcomm’s pivot from smartphone reliance. The IoT segment wasn’t far behind, growing 27% as demand for smart home devices and industrial IoT solutions surges.