Qualcomm gets $260 price target with 53% upside as AI push accelerates

24/7 Wall St. initiated Qualcomm Inc. with a BUY rating and $260.52 price target, implying 52.7% upside from the July 16 close of $170.61.

"The bull thesis rests on Qualcomm becoming a credible third player in hyperscaler custom silicon," the firm said in a note Friday. "CEO Cristiano Amon confirmed a custom silicon engagement with a leading hyperscaler is on track for initial shipments in the December quarter."

Qualcomm shares have round-tripped dramatically this year. The stock hit a 52-week low near $121.54 in March, then surged to $258.96 after the June 24 Investor Day, where management doubled its 2029 non-handset revenue target to $40 billion and set a $15 billion AI data center sales goal. That rally has since reversed, leaving the stock roughly flat year to date at plus 0.77%.

The 90% confidence rating reflects a blended valuation approach. The firm's trailing P/E-based price stands at $170.61, while the forward P/E-based price reaches $241.56. After adjustments for sector momentum, earnings growth, volatility and social sentiment, the final predicted price lands at $260.52. The bull-case scenario points to $269.05 if the data center ramp lands cleanly and China handset revenue bottoms in the current quarter.

Fundamentals remain healthy despite the pullback. Q2 FY26 revenue came in at $10.60 billion, with non-GAAP EPS of $2.65 beating consensus by 3.67%. Automotive revenue hit a record $1.326 billion, up 38% year over year, while handset revenue fell 13% on memory supply constraints and Chinese OEM channel drawdowns. Management guided automotive to 50% YoY growth in Q3, exiting fiscal 2026 at a $6 billion-plus run rate.

The bear case centers on customer concentration. Qualcomm expects only 20% share of Apple phones launching in fall 2026, with no relationship beyond that. Q3 FY26 guidance calls for a step-down to $9.2 billion to $10 billion in revenue and $2.10 to $2.30 in EPS. Operating income fell 26% year over year largely on the memory cycle, and insider activity has skewed toward net selling across 55 transactions. The bear-case downside target is $215.18, still meaningfully above the current price.

Qualcomm trades at a forward P/E near 14 times on $15.27 forward EPS, a discount to peers. Nvidia Corp. trades at roughly 42 times earnings with Q1 FY27 data center revenue of $75.25 billion, up 92% year over year. Broadcom Inc., the closer analog, already sells custom AI accelerators to hyperscalers, booking $10.80 billion in Q2 FY26 AI semiconductor revenue, up 143% year over year, and carries a $1.78 trillion market cap.

The price target implies Qualcomm could capture even a fraction of the rerating Broadcom has enjoyed. Polymarket traders assign an 87% probability that Qualcomm beats its next earnings report on July 29. The key catalysts to watch are whether that report confirms the Chinese handset bottom and reiterates hyperscaler custom silicon timing. A further push-out of data center shipments into 2027 would undermine the thesis.

This article is for informational purposes only and does not constitute investment advice.