Qualcomm shares fell 2.35% in the latest trading session and have declined 7.1% over the past 21 trading days. This downtrend reflects renewed investor concerns over weakness in the handset business and potential losses related to Apple modem contracts. The pullback has increased volatility in the stock, with trading volume rising 18% above its 30-day average as market participants reassess the company’s near-term growth prospects.

Despite recent underperformance, Qualcomm continues to generate industry-leading free cash flow, which expanded by 12% year-over-year in the last fiscal year. The company’s disciplined capital return program supports an above-average shareholder yield of 6.6%, comprising a 2.0% dividend yield and substantial opportunistic share repurchases. Qualcomm has returned over $11 billion to shareholders in the past four quarters and expects lower cash taxes to further bolster free cash flow generation in the coming periods.

Qualcomm’s strategic pivot into AI data center inferencing and edge/on-device AI applications positions it for meaningful non-handset revenue growth. Management forecasts that AI-related chip deployments will contribute a double-digit percentage of total revenue by the end of next fiscal year. Trading at approximately 15x forward earnings and offering a 6.7% free cash flow yield, the stock appears mispriced relative to peers, given Qualcomm’s diversified end markets, robust R&D capabilities and expanding customer base beyond smartphones.