Qualcomm (QCOM) may have delivered another earnings beat in its fiscal third quarter, but the initial post-results dip suggests the market still underestimates the semiconductor leader’s evolving growth story. Brokers at Fletrade argue that the company’s execution across automotive, IoT, AI infrastructure, and PC processors deserves more “respect” from investors, with long-term fundamentals pointing to meaningful upside potential.

Shares of Qualcomm ticked lower after the bell following Tuesday’s report, despite revenue and earnings exceeding consensus estimates. The wireless technology giant posted fiscal Q3 revenue of $10.4 billion, topping forecasts of $10.34 billion and growing 10% year-over-year. Non-GAAP EPS came in at $2.77, beating expectations by 2.2%. 

Despite this strong showing, the market reaction was initially muted before QCOM shares bounced back in today’s session.

Analysts say investor hesitation stems from doubts about Qualcomm’s growth beyond smartphones, but argue this view is outdated as the company’s diversification is already driving real gains in high-value markets.

Diversification Gains Traction

Handset chip revenue rose 7% to $6.3 billion, but the real momentum came from Qualcomm’s growth segments. Automotive revenue surged 21% year-over-year to $984 million, setting a quarterly record. IoT revenue climbed 24% to $1.7 billion, benefiting from demand across industrial, consumer, and edge computing applications.

The company’s Snapdragon X platform is expected to power over 100 PC models by 2026, marking Qualcomm’s most aggressive push yet into the Windows-on-ARM market. Additionally, the $2.4 billion acquisition of Alphawave Semi adds critical data center connectivity IP, strengthening Qualcomm’s AI infrastructure capabilities at a time when demand for inference and edge processing is accelerating.

These moves align with a long-term roadmap to achieve $22 billion in combined automotive and IoT revenues by fiscal 2029. “Qualcomm is building an ecosystem approach,” explains the firm’s technology strategist. “They’re not just selling chips, they’re embedding themselves into the architecture of next-gen cars, smart devices, and AI-driven computing platforms.”

Automotive Growth Pipeline

A major growth engine lies in Qualcomm’s Snapdragon Digital Chassis and ADAS stack, which will debut globally with BMW’s Neue Klasse vehicles. Within 18 months, Qualcomm expects 20 OEMs to launch Autopilot solutions powered by its technology.

Qualcomm’s $45 billion automotive pipeline includes significant ADAS opportunities, and Fletrade brokers see its integrated safety and autonomy tech gaining share as automakers adopt centralized architectures.

AI and Data Center Ambitions

CEO of Qualcomm, Cristiano Amon, disclosed that Qualcomm is in advanced talks with a leading hyperscaler to deliver custom ARM-based solutions, targeting fiscal 2028 for revenue generation. This initiative, combined with the Alphawave IP acquisition, complements Qualcomm’s Oryon CPU and Hexagon NPU for AI workloads.

 Qualcomm is targeting efficiency metrics, such as tokens per dollar and tokens per watt, which are critical in a market increasingly focused on cost-effective AI inference. “This is a very different approach from brute-force GPU scaling,” says one broker. “Qualcomm’s strength is in power-efficient computing, and that plays perfectly into the edge AI narrative.”

Global Partnerships and China’s Strength

The recently renewed multi-year Xiaomi agreement will ensure Snapdragon 8 Series platforms remain the backbone of flagship devices in China and globally. With increasing annual volumes, this deal reinforces Qualcomm’s three-decade presence in China’s competitive handset market, a region where stability and deep relationships matter.

“China remains a complex but essential growth geography for Qualcomm,” notes one strategist. “By locking in premium-tier partnerships, they’re securing market share in the segment with the best margins.”

Shareholder Returns and Valuation

Qualcomm returned $3.8 billion to shareholders in fiscal Q3 through dividends and buybacks, while maintaining healthy margins. Its fiscal 2025 dividend is projected at $3.59 per share, rising steadily to $3.91 per share by fiscal 2028.

The stock trades at a forward P/E multiple of 13x, below its 10-year average of 15.4x. Based on consensus forecasts for adjusted EPS growth from $10.2 in fiscal 2024 to $13.3 in fiscal 2028, Fletrade’s valuation model suggests that a re-rating to 14x forward earnings could put QCOM at $187 by August 2027, a 20% gain from current levels. Including dividend reinvestments, total returns could exceed 25%.

Analyst Sentiment

Among 32 analysts covering QCOM, 15 rate it a “Strong Buy,” one a “Moderate Buy,” 15 recommend “Hold,” and one rates it a “Strong Sell.” The average price target of $179 is well above the current price of $154, implying a double-digit upside over the next 12 months.

The numbers point to a mismatch between Qualcomm’s growth trajectory and its market valuation. “Investors are still anchored to the handset cycle, but Qualcomm is quietly building multi-billion-dollar businesses in automotive, IoT, and AI,” the firm’s semiconductor analyst concludes. “If they keep executing, the market will have to close that gap.”

Outlook

With fiscal Q4 revenue guidance of $10.3 billion to $11.1 billion, Qualcomm’s near-term visibility remains solid. The company’s diversified growth model, disciplined capital returns, and undervalued earnings multiple give it a balanced risk-reward profile heading into 2026 and beyond.

As Fletrade brokers sum it up: “Qualcomm doesn’t just deserve more respect, it deserves a premium for the way it’s positioning itself for the AI era, autonomous driving, and connected devices. This is no longer a one-product-cycle company; it’s a multi-platform growth engine.”