By Adam Clark
Qualcomm is laying out a bright future for its diversification from a specialist smartphone processor company to a wide-ranging chip provider. It just needs the market to get past the impending loss of revenue from Apple.
Qualcomm set out new targets at an investors day on Tuesday. Perhaps the most eye-catching was targeting revenue of $4 billion from its personal computer business by 2029, laying down a challenge to Intel and Advanced Micro Devices.
That was just one part of a goal of reaching an additional $22 billion in combined annual revenue over the five-year time frame from providing chips for PCs, vehicles and the Internet of Things (IoT), beyond its traditional strength in smartphones.
It's an ambitious plan, but will likely need to be to make up for the expected loss of revenue from Apple. Qualcomm currently builds the modem chips that the iPhone maker uses in its smartphones. Qualcomm previously signed a contract to supply Apple with 5G chips for its iPhone launches until 2026 but is still expected to eventually lose a large part of the business to Apple's in-house chips.
"We continue to have confidence in CEO Amon's ability to move Qualcomm beyond a modem and cellular IP company to become a true broad-based semis player, reinforced by the constructive update at today's Investor Day. That said, if there was one knock, we think the loss of Apple will weigh until 2027," wrote Susquehanna analyst Christopher Rolland in a research note.
Rolland kept a Positive rating on Qualcomm stock but lowered his target price to $210 from $230.
Qualcomm shares were 0.1% down at $164.54 in premarket trading on Wednesday.
Write to Adam Clark at adam.clark@barrons.com
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(END) Dow Jones Newswires
November 20, 2024 08:24 ET (13:24 GMT)
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