Time To Buy Qualcomm Stock?

Qualcomm stock (NASDAQ:QCOM) has been a middling performer this year, rising just about 3% year-to-date amid uncertainties surrounding U.S.-China trade and tariffs on imported semiconductors. However, Qualcomm’s business has been strong up until the last quarter. In Q2 FY’25 (March 2025), the company posted better-than-expected results, with revenue rising 15% year-over-year to $10.84 billion, while earnings stood at $2.85 per share as the smartphone market picked up following a post-Covid-19 lull. Qualcomm is increasingly looking to diversify its revenue stream beyond mobile chipsets, targeting an equal revenue split between handsets and non-handsets by the end of this decade. The automotive sector will be a major focus for the company, with semiconductor content in cars targeting $8 billion in revenue by fiscal year 2029. Qualcomm is also expanding into the data center market with the acquisition of Alpha Wave.

Overall, considering the company’s reasonably strong performance and outlook, we think the stock looks attractive, making it a good pick to buy at its current price of around $160. We believe there is minimal cause for concern with QCOM stock, which makes it attractive given that its current valuation looks moderate. We arrive at our conclusion by comparing the current valuation of QCOM stock with its operating performance over the recent years as well as its current and historical financial condition. Our analysis of Qualcomm along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a very strong operating performance and financial condition, as detailed below. However, for investors who seek lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative, having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

How Does Qualcomm’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, QCOM stock looks slightly cheap compared to the broader market.

• Qualcomm has a price-to-sales (P/S) ratio of 4.2 vs. a figure of 3.0 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 12.4 compared to 20.5 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 16.2 vs. the benchmark’s 26.4

How Have Qualcomm’s Revenues Grown Over Recent Years?

Qualcomm’s Revenues have seen notable growth over recent years.

• Qualcomm has seen its top line grow at an average rate of 5.3% over the last 3 years (vs. increase of 5.5% for S&P 500)
• Its revenues have grown 12.1% from $36 Bil to $42 Bil in the last 12 months (vs. growth of 5.5% for S&P 500)
• Also, its quarterly revenues grew 17.5% to $11 Bil in the most recent quarter from $9.4 Bil a year ago (vs. 4.8% improvement for S&P 500)

How Profitable Is Qualcomm?

Qualcomm’s profit margins are much higher than most companies in the Trefis coverage universe.

• Qualcomm’s Operating Income over the last four quarters was $11 Bil, which represents a high Operating Margin of 26.4% (vs. 13.2% for S&P 500)
• Qualcomm’s Operating Cash Flow (OCF) over this period was $14 Bil, pointing to a high OCF Margin of 34.0% (vs. 14.9% for S&P 500)
• For the last four-quarter period, Qualcomm’s Net Income was $11 Bil – indicating a considerably high Net Income Margin of 25.9% (vs. 11.6% for S&P 500)

Does Qualcomm Look Financially Stable?

Qualcomm’s balance sheet looks very strong.

• Qualcomm’s Debt figure was $15 Bil at the end of the most recent quarter, while its market capitalization is $176 Bil (as of 6/11/2025). This implies a strong Debt-to-Equity Ratio of 8.5% (vs. 19.9% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $14 Bil of the $55 Bil in Total Assets for Qualcomm.  This yields a very strong Cash-to-Assets Ratio of 25.7% (vs. 13.8% for S&P 500)

How Resilient Is QCOM Stock During A Downturn?

QCOM stock has seen an impact that was slightly better than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on QCOM stock? Our dashboard How Low Can Qualcomm Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous market crashes.

Inflation Shock (2022)

• QCOM stock fell 45.1% from a high of $189.28 on 15 December 2021 to $103.88 on 3 November 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 15 May 2024
• Since then, the stock has increased to a high of $227.09 on 19 June 2024 and currently trades at around $160

Covid Pandemic (2020)

• QCOM stock fell 36.5% from a high of $95.91 on 17 January 2020 to $60.91 on 20 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 30 July 2020

Global Financial Crisis (2008)

• QCOM stock fell 48.2% from a high of $56.37 on 15 August 2008 to $29.21 on 20 November 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 10 February 2011

Putting All The Pieces Together: What It Means For QCOM Stock

In summary, Qualcomm’s performance across the parameters detailed above are as follows:

• Growth: Very Strong
• Profitability: Very Strong
• Financial Stability: Extremely Strong
• Downturn Resilience: Neutral
• Overall: Very Strong

This isn’t appropriately reflected in the stock’s moderate valuation which is why we think it is attractive, which supports our conclusion that QCOM is a good stock to buy.

While QCOM stock looks promising, investing in a single stock can be risky. On the other hand, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

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