Qualcomm Incorporated

Technical Analysis

QCOM has shown volatile but resilient performance, currently trading in the middle of its 52-week range after a recent 8.82% monthly decline. While the stock is moderately oversold, its history of recovering from a 29% drawdown earlier this year reflects underlying strength. The higher beta of 1.2 confirms it moves more sharply than the market, appealing to investors comfortable with volatility.

Fundamentals

QCOM’s Q4 2025 revenue grew to $11.27 billion, though net income swung to a $3.12 billion loss due to a significant one-time tax expense. The company maintains robust liquidity with current and quick ratios above 2, and conservative debt levels indicate financial stability. However, negative return on equity and limited cash flow visibility temper the otherwise solid operational health.

Valuation

The stock’s TTM P/E of 32.72 appears high, but a PEG ratio of 0.07 suggests strong growth potential may justify the valuation. Elevated P/B and EV/EBITDA ratios raise concerns about absolute value, though growth expectations seem priced in. Without peer data, it’s unclear if QCOM’s premium aligns with sector norms.

Risks

QCOM’s beta above 1.2 implies heightened volatility, and its 29% maximum drawdown highlights susceptibility to market swings. Though short interest is low, sector-specific challenges or liquidity strains during downturns remain relevant considerations for investors.

Investment Recommendation

Buy. QCOM’s resilient technical profile, strong revenue growth, and healthy balance sheet underpin its long-term potential. The low PEG ratio indicates the market may be undervaluing its growth trajectory, despite near-term volatility and tax-related profit pressures. For investors with a moderate risk appetite, QCOM offers exposure to semiconductor strength with solid fundamentals.

RockFlow Model Forecast: Three Scenarios for 2026

Of course. Here is a 12-month outlook for Qualcomm (QCOM):

12-Month Outlook for QCOM

The outlook for QCOM is cautiously optimistic, driven by its entrenched position in the smartphone recovery and growing momentum in the Internet of Things (IoT) and automotive sectors. Key catalysts include the stabilization of the handset market, the adoption of its new AI-capable Snapdragon platforms for PCs, and expansion beyond mobile into autos and edge devices. Potential risks center on persistent cyclicality in its core smartphone business, intense competition, and the market's high expectations embedded in its current valuation. Based on a discounted cash flow analysis, a reasonable 12-month target price range is $180 - $200, suggesting moderate upside from the current price, contingent on the successful execution of its diversification strategy.

Wall Street Consensus

Most Wall Street analysts are optimistic about Qualcomm Incorporated's 12-month outlook, with consensus target around $159.42, indicating expected upside potential.

Overall, QCOM has investment potential but also faces challenges. Here are key factors to weigh before investing.

QCOM has demonstrated volatile but resilient performance over the past year, currently trading near the middle of its wide annual range after experiencing a significant drawdown.

The stock has underperformed the market over the past three months, with a notable 8.82% decline over the past month exacerbating this weakness. Its beta above 1.2 confirms this period of higher volatility relative to the broader market.

Currently trading approximately 41% above its 52-week low and 20% below its high, QCOM is positioned in a moderately oversold state given recent declines. However, the substantial 29% maximum drawdown indicates the stock has experienced and recovered from more severe pressure earlier in the year.

Revenue & Profitability: QCOM showed strong revenue growth in Q4 2025, increasing to $11.27 billion from $10.37 billion in the prior quarter. However, profitability deteriorated significantly, with net income swinging to a $3.12 billion loss due to a substantial $6.09 billion income tax expense, despite maintaining a solid gross profit margin of 55.3%.

Financial Health: The company maintains a strong liquidity position with current and quick ratios of 2.82 and 2.10 respectively, while demonstrating conservative debt management through a low debt ratio of 29.5% and healthy interest coverage of 17.2x. However, cash flow metrics appear unavailable or zero in the reporting period, limiting full assessment of cash generation capabilities.

Operational Efficiency: Operational efficiency metrics present a mixed picture, with return on equity deeply negative at -14.7% due to the quarterly tax-impacted loss, while return on capital employed remained positive at 7.1%. Asset turnover of 0.22 indicates modest revenue generation relative to the asset base, though inventory turnover appears relatively low at 0.77x.

Valuation Level: QCOM's current valuation metrics present a mixed picture. While the TTM PE ratio of 32.72 appears elevated, the forward PE is negative due to expected earnings fluctuations, making traditional PE analysis challenging. However, the extremely low PEG ratio of 0.07 suggests significant growth expectations are priced in, potentially indicating undervaluation relative to growth prospects, though the high PB of 8.55 and EV/EBITDA of nearly 50 remain concerning from an absolute value perspective.

Peer Comparison: Unfortunately, without industry average data, a definitive peer comparison cannot be conducted. The analysis would benefit from contextualizing QCOM's multiples against semiconductor industry benchmarks to determine whether its valuation premium is justified relative to sector norms. A proper industry comparison is essential to assess whether QCOM's current pricing reflects company-specific strengths or broader sector valuation trends.

Volatility Risk: The stock's beta of 1.212 indicates it is moderately more volatile than the broader market and tends to amplify market swings. This is corroborated by its significant one-year maximum drawdown of -29.11%, reflecting substantial downside volatility and considerable price depreciation during recent downturns.

Other Risks: The absence of notable short interest suggests minimal immediate pressure from bearish speculative positions. However, the lack of this metric does not preclude other risks, such as potential liquidity challenges during volatile periods or broader sector-specific headwinds.