“I think Qualcomm is just getting what Qualcomm deserves,” said Amon on Yahoo Finance Live. “We have been investing in foundational technologies that enable so many things — to the technology that can connect you to the virtual reality. And I think Qualcomm is being recognized for this incredible technology we have.”
That appears to be the case.
Shares of Qualcomm surged more than 6% to $181 on Tuesday as the company held a key investor day to outline how it’s diversifying its business beyond supply components to Apple smartphones. The stock rose another 1% on Wednesday in the wake of Amon’s upbeat comments to Yahoo Finance.
At the event, Amon and his executives talked up Qualcomm’s growing position in the auto tech market, revealing a new deal with car giant BMW alongside one with General Motors. The company also highlighted its yawning backlog of deals to support the expansion of the metaverse and upside potential from the shift to 5G smartphones.
In total, Qualcomm said it sees a seven times increase in its addressable market over the next decade as it pushes into new end markets.
The company outlined at least 12% growth by 2024 in its QCT business (chip business) despite Apple’s business lessening in importance.
“On the financial front, the company laid out impressive list of targets, while significantly de-risking the targets by removing 80% of Apple in FY24, albeit with no certainty that the business will indeed be lost by that much that soon,” pointed out Deutsche Bank analyst Ross Seymore. “Specifically, the company targets a total revenue of +$46 billion, QCT segment rev growth of mid-teens compound annual growth rate and operating margins of +30% as QTL revenue and margins maintain at current levels, implying PF EPS of $13.00 by FY24 (+20% from Deutsche Bank estimate of $11.03 in FY23).”
Seymore reiterated a Buy rating on Qualcomm shares and hiked the price target to $210 from $190.