Qualcomm Stock: Chipmaker Charts Path From Smartphones, Apple

Chipmaker Qualcomm (QCOM) on Tuesday outlined plans to diversify its business from smartphones as major customer Apple (AAPL) transitions to its own wireless chips. Qualcomm stock surged on the news.

X

At an investor event in New York City, Chief Executive Cristiano Amon said the company’s total addressable market will increase from $100 billion today to $700 billion in the next decade. The growth comes from Qualcomm expanding into chips for automobiles and Internet of Things devices for consumer and industrial applications.

“We’ll always be the company defining the pace of innovation in mobile,” Amon said. “But we’re no longer defined by a single end market and a single customer relationship.”

In the smartphone space, Qualcomm now is focused on supplying modems and other chips for high-end Android handsets from Samsung and Chinese vendors.

Qualcomm Stock Extends Breakout

Meanwhile, the company is diversifying its business into markets such as automotive, mobile computers and wearables, Amon said. It is making central processing units, graphics processing units and artificial intelligence chips for devices on the edge of networks.

“We are now diversified across many large addressable markets,” he said.

On the stock market today, Qualcomm stock jumped 7.9% to close at 181.81. In intraday trading, it notched an all-time high of 183.73.

On Nov. 5, Qualcomm stock broke out of a 40-week consolidation pattern at a buy point of 168.04, according to IBD MarketSmith charts. The breakout occurred two days after Qualcomm reported fiscal fourth-quarter results. The 5% buy zone extends to 176.44, based on IBD trading guidelines.

Automotive Market Growth

In the automotive market, Qualcomm is working with 25 carmakers. On Tuesday, BMW Group (BMWYY) selected Qualcomm to provide technology for its advanced driver-assistance systems and automated driving platform.

Qualcomm will expand its reach in the automotive market with the planned purchase of Veoneer (VNE). On Oct. 4, Qualcomm and investment firm SSW Partners announced a deal to buy Veoneer for $4.5 billion. After the deal closes, Qualcomm will take over Veoneer’s Arriver business and SSW will get the rest of the automotive safety company. Arriver makes computer vision, drive policy and driver assistance systems.

The amount of computer chips in automobiles is exploding, Amon said. In addition to chips for advanced driver-assistance systems and autonomous driving, Qualcomm is making chips for digital cockpits and wireless connectivity, he said.

Qualcomm ‘Will Enable The Metaverse’

In consumer devices, Qualcomm hopes to gain a bigger share of chips for notebook computers as those devices shift to Arm-based processors.

Plus, Qualcomm sees a big opportunity in providing chips to power virtual reality and augmented reality headsets, Amon said.

“Mixed reality, XR (extended reality), virtual reality and augmented reality is the next computing platform,” he said. “We will enable the metaverse.”

Qualcomm stock ranks No. 15 out of 32 stocks in IBD’s fabless semiconductor industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 96 out of 99.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

YOU MAY ALSO LIKE:

Augmented Reality Won’t Take Off Until Apple Enters Market, Says Morgan Stanley

Industrial Automation Stocks Perk Up Amid Record Robot Sales

Best Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists

Find Winning Stocks With MarketSmith Pattern Recognition & Custom Screens

See Stocks On The List Of Leaders Near A Buy Point