Nvidia Isn’t the Only AI Winner. Qualcomm May Be the Next Stock to Watch
Qualcomm is quietly lining up data center wins with the world's biggest hyperscalers, and the revenue clock is about to start ticking. Whether it can offset mounting handset headwinds before Wall Street loses patience is the real question.
Qualcomm (NASDAQ:QCOM | QCOM Price Prediction) is trading at $181.51. The 24/7 Wall St. price target for Qualcomm is $225.91 over the next 12 months, indicating 24.46% upside. This wins the stock a buy rating with high confidence from the model.
24/7 Wall St. Price Target Summary
| Metric | Value |
|---|---|
| Current Price | $181.51 |
| Price Target from 24/7 Wall St. | $225.91 |
| Upside | 24.46% |
| Recommendation | BUY |
| Confidence Level | 90% |
Most AI money is concentrated in GPU leaders, but Qualcomm is about to start booking data center revenue. Management says two custom silicon wins with global-scale hyperscalers should start generating revenue in the December quarter, and wafer production for both is already underway.
The data center targets are $5 billion in fiscal 2027 and $15 billion in fiscal 2029. That is a real AI growth story attached to a stock that pays a 1.93% dividend (we featured seven other suppliers powering the AI data-center expansion, from power to cooling, in a free report here).
A Monthly Pullback Ahead of the Fiscal Q4 Report
Over the past week the stock gained 3.3%. That followed a 10.13% slide over the past month. Shares are up 7.79% year to date and sit inside a 52-week range of $120.88 to $257.56.
In fiscal Q3, revenue came in at $9.95B, ahead of the $9.67B consensus. Non-GAAP EPS of $2.21 came in just short of the $2.22 estimate, which ended a six-quarter beat run. Handsets fell 20% while automotive rose 61%.
Recent headlines have been positive. Qualcomm announced a trial verdict win on October 13, declared its quarterly dividend and scheduled its fiscal Q4 report. Guidance for that quarter calls for revenue of $9.70B to $10.50B and non-GAAP EPS of $2.05 to $2.25.
Why Bulls See $243 Within Reach
Management expects non-handset revenue growth to speed up from 24% in fiscal 2026 to more than 60% in fiscal 2027, on the way to $40B by fiscal 2029.
Annualized automotive revenue leaving fiscal 2026 is now expected to reach about $7 billion, and BMW has named Qualcomm its lead compute silicon provider for ADAS and digital cockpits. The first high-bandwidth compute accelerator is due in mid-2027. If those targets arrive on schedule, our bull scenario reaches $243.13.
Handset Headwinds Worth Watching
Qualcomm expects its share of upcoming iPhones to be materially lower than 20%. It also sees Android revenue down 20% in fiscal 2027, an EPS drag of more than $1.50. Fiscal Q3 operating income fell 41.1%.
Spending tied to the Alphawave and Modular deals raised expenses, and management plans double digit price increases to bring gross margins back to their historical range. Only 11 analysts have a bullish rating on the stock, while 23 rate it a hold. Even so, our bear case still lands at $190.77.
How Qualcomm Compares to Its AI Chip Peers
| Company | Forward P/E | Dividend Yield |
|---|---|---|
| Qualcomm | 19x | 1.93% |
| Nvidia (NASDAQ:NVDA) | 14x | 0.13% |
| Broadcom (NASDAQ:AVGO) | 18x | 0.79% |
Broadcom is the closest match because it already leads in custom hyperscaler accelerators, the market Qualcomm is entering. Broadcom’s AI semiconductor revenue rose 221% to $16.70 billion, yet the stock trades at a lower forward multiple than Qualcomm.
Nvidia is the benchmark for AI valuation. Its data center revenue rose 117% to $89.023 billion. On forward earnings, Qualcomm trades at a higher multiple than either peer. Its edge is income and diversification. That makes the 24/7 Wall St. price target look reasonable.
Data Center Revenue Tips the Scale
The 24/7 Wall St. price target of $225.91 comes with a buy rating and 90% confidence. The swing factor is whether hyperscaler revenue shows up in the December quarter.
I’d grow more positive if the fiscal Q4 report confirms that growth and gross margins stabilize. I’d turn more cautious if handset drops deepen beyond guidance. On balance, I think the upside outweighs the risk.
| Year | Price Target from 24/7 Wall St. |
|---|---|
| 2026 | $196.62 |
| 2027 | $225.91 |
| 2028 | $257.06 |
| 2029 | $281.34 |
| 2030 | $316.21 |
The projections rest on Qualcomm staying on track toward its fiscal 2029 targets. The biggest swing factors are execution in the data center and how quickly handset demand recovers.
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Vandita Jadeja is a financial publisher with over a decade of experience writing about financial topics, including investment, savings, retirement, insurance and banking. Vandita is a Chartered Accountant who loves to debunk financial concepts for readers.
Her work has appeared on sites that include The Motley Fool, InvestorPlace, and Benzinga. She covers investing and focuses on stock picks and price prediction for 24/7 Wall St.
When not looking for the next stock investment opportunity, she can be found traveling, reading, chasing sunsets and enjoying her iced latte.
