By Nate Wolf
Qualcomm shareholders haven't enjoyed much positive news recently, and analysts at BofA Securities don't expect that to change any time soon.
The investment bank reinstated coverage of Qualcomm with an Underperform rating and a $145 price target in a research note Tuesday. The chip maker is a leader in smartphone processors, but BofA argued that it is already losing share in that business while playing catch-up in other markets.
Qualcomm stock fell 3.1% to $133.81 in premarket trading. Shares have dropped 19% this year, tumbling in early February after the company offered a disappointing outlook for the current quarter.
Qualcomm didn't immediately respond to Barron's request for comment.
Investors have known about Qualcomm's most pressing challenge for years: Apple, its top customer, is phasing Qualcomm modems out of iPhones by next fall. The company faces a roughly $7 billion revenue cliff from the loss of its iPhone business, BofA estimates.
Apple isn't the only customer looking to create its own chips. Qualcomm's content share in Samsung's fall 2026 Galaxy models will drop to 75% from 100%, BofA noted, while Chinese smartphone maker Xiaomi has dedicated $7 billion to internal silicon chip research.
"QCOM's core equity risk is increasingly defined by their three top customers (Apple, Samsung, Xiaomi) and their willingness (and ability) to internalize key silicon over time," wrote analyst Vivek Arya.
Qualcomm's other revenue streams may not be enough to overcome these hurdles. Plenty of other smartphone manufacturers exist, but the industry is already mature and faces its own troubles this year. Memory component prices are skyrocketing, which could weigh on sales of lower-priced smartphones. Qualcomm has some insulation as a premium supplier, BofA acknowledged.
"While our near-term handsets outlook is impacted by industry-wide memory supply constraints, we are encouraged by end-consumer demand for premium and high tier smartphones," Qualcomm CEO Cristiano Amon said last month.
The company is making progress outside smartphones. BofA expects revenue from automotive and internet-of-things end markets to grow at a combined 19% annual clip from 2025 to 2029. Qualcomm is also entering the massive artificial-intelligence market with its AI accelerators and server processing units.
The question is whether the company can compensate for its losses in the smartphone market and keep up with its chip-making peers with greater exposure to AI and other growth trends. BofA is skeptical.
The firm expects revenue to grow at around 2% a year through fiscal 2028 as diversification into higher-growth sectors "is largely offset by the potential loss of $7bn in Apple modem revenue and competitive share losses at Samsung," Arya wrote.
Write to Nate Wolf at nate.wolf@barrons.com
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March 10, 2026 10:14 ET (14:14 GMT)
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