With Strong Cash Flow, Qualcomm Stock Poised to Rise?

Qualcomm (QCOM) could be a good pick for your portfolio, with its high cash yield, good fundamentals, and discounted valuation. Companies like this can use cash to fuel additional revenue growth or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market.

What Is Happening With QCOM

QCOM stock is currently trading at P/S (Price-to-Sales) ratio that is at a meaningful discount to its 3-month and 2-year highs and also below its 3-year average.

The stock may not reflect it yet, but here is what’s going well for the company. Qualcomm’s Q1 FY2026 saw record automotive and IoT revenues, with automotive exceeding $1.1 billion for the second consecutive quarter, driven by Snapdragon Digital Chassis demand. Recent CES 2026 announcements included Leapmotor adopting dual Snapdragon Elite chips for unified vehicle computing. At MWC 2026, the new Snapdragon Wear Elite gained design wins from Samsung and Google for next-gen AI wearables, underscoring diversification into personal AI devices and robust market traction beyond traditional handsets.

QCOM Has Good Fundamentals

• Good Cash Yield: Not many stocks offer free cash flow yield of 9.3%, but Qualcomm stock does
• Strong Margin: Last 12 month operating margin of 27.2%
• Growth: Last 12 revenue growth of 10.3% – low growth, but this selection is all about high yield and margin
• Valuation: QCOM stock currently trading at 41% below 2Y high, 11% below 1M high, and at a PS lower than 3Y average.

Below is a quick comparison of QCOM fundamentals with S&P medians.

*LTM: Last Twelve Months

But What Is The Risk Involved?

While QCOM stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. QCOM plunged nearly 79% in the Dot-Com Bubble, took a hit of 48% during the Global Financial Crisis, and dropped about 44% in the recent inflation shock. Even the less severe events — like the 2018 Correction and the Covid selloff — dragged the stock down over 33% and 36%, respectively. Strong fundamentals matter, but sharp market selloffs still push down even solid names hard. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read QCOM Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

For more details and our view, see Buy or Sell QCOM Stock.

Stocks Like QCOM

Not ready to act on QCOM? Consider these alternatives:

1. Capital One Financial (COF)
2. Blackstone (BX)
3. General Mills (GIS)

We chose these stocks using the following criteria:

1. Greater than $2 billion in market cap
2. Dipped last month & meaningfully below 2Y high
3. Current P/S < last few years average
4. Strong operating margin with no instances of large margin collapse
5. High free cash flow yield

A portfolio of stocks with the criteria above would have performed as follows since 12/31/2016:

• Average 6-month and 12-month forward returns of 10.4% and 20.4%, respectively
• Win rate (percentage of picks returning positive) of about 74% for 12-month period
• Strategy consistent across market cycles

Portfolios Win When Stock Picks Fall Short

Individual stocks can soar or tank, but one thing matters: staying invested. The right portfolio can help you stay invested, capture upside, and mitigate the downside associated with any individual stock.

Beating the market consistently is hard, but the Trefis High Quality (HQ) Portfolio makes it look achievable. By selecting 30 high-conviction stocks, the HQ strategy has historically outpaced the S&P 500, S&P Mid-cap, and Russell 2000. See how this curated selection delivers superior risk-adjusted returns in our detailed performance factsheet.