The past five years have been painful for Qualcomm (NASDAQ: QCOM) investors. The company's dependence on the smartphone market for a significant chunk of revenue has weighed on the stock during this period. Qualcomm stock has appreciated just 47% over the past five years, underperforming the broader semiconductor sector.
The PHLX Semiconductor Sector shot up by 272% during the same period, driven by the incredible demand for artificial intelligence (AI) chips. Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005.
But according to our analysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue » However, Qualcomm has now jumped onto the AI bandwagon.
I won't be surprised to see this semiconductor stock step on the gas over the next five years, driven by its entry into the AI chip market. Let's look at the potential upside Qualcomm could deliver by the end of the decade. Qualcomm's revenue in the first nine months of the ongoing fiscal 2026 dropped on a year-over-year basis to $32.8 billion from $33 billion in the same period last year.
Analysts are anticipating that the company's revenue will contract nearly 3% this fiscal year to $42.9 billion. The poor top-line performance will negatively impact Qualcomm's bottom line, with its earnings per share projected to drop by 13% in fiscal 2026. Counterpoint Research predicts a 14% drop in smartphone shipments this year.
Qualcomm gets 51% of its revenue from the smartphone segment, which explains why the industry's poor performance is poised to weigh on its financial performance. The smartphone market's decline is anticipated to slow down to 1% next year, followed by a 5% increase in shipments in 2028. So, Qualcomm's largest business could step on the gas by the end of the decade.
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