Qualcomm Underperform Rating, $145 Target on 2% Growth and $8B Apple Loss
Bank of America reinstated coverage of Qualcomm with an Underperform rating and $145 price objective, projecting a 2% sales and 1% EPS CAGR from 2025–2028 versus 17% industry growth. It faces a $7–8 billion Apple modem revenue loss by 2027 as Samsung cuts its share to 75% and Xiaomi invests $7 billion in in-house chips.
1. Bank of America Reinstates Coverage
Bank of America returned to Qualcomm with an Underperform rating and established a $145 price objective, citing limited upside and intensifying competition in its core markets.
2. Lukewarm Growth Projections
The firm expects Qualcomm’s core business to deliver just a 2% sales CAGR and 1% EPS CAGR from 2025–2028, versus 17% growth across the semiconductor sector.
3. Smartphone Segment Headwinds
Qualcomm anticipates losing $7–8 billion in Apple modem revenue by fall 2027, while Samsung plans to reduce Qualcomm processor share in Galaxy devices to about 75% and Xiaomi allocates $7 billion to develop internal chips.
4. Diversification and AI Ambitions
Qualcomm’s automotive and IoT chip revenue is forecast to grow 19% annually to $17.7 billion by fiscal 2028, and AI data center efforts could add $1–2 billion in revenue, equating to $0.20–0.40 in incremental EPS.