Key insights
- Seaport Global downgraded Qualcomm to Sell due to concerns about rising memory prices impacting mobile phone volumes and Qualcomm's market share. Apple is expected to gain share as Android makers face cost pressures. Qualcomm's potential removal from Apple's supply chain and pricing pressure from Chinese OEMs further contribute to the bearish outlook, impacting US equities.
Investing.com - Seaport Global Securities downgraded Qualcomm (NASDAQ:QCOM) to Sell from Neutral on Monday, setting a price target of $100. The stock has declined 23.6% year-to-date to $129.82, trading near its 52-week low of $120.80. Despite the bearish outlook, InvestingPro analysis suggests the stock is undervalued, with a Fair Value significantly above current levels.
The firm expects mobile phone volumes to drop 10%-15% this year due to increased memory prices. Phones will either become more expensive or feature reduced memory specifications, extending upgrade cycles and depressing volumes.
Apple is positioned to gain market share as Android handset makers reduce memory content or cut prices, while Apple maintains the same memory levels as last year at unchanged prices. Qualcomm is expected to be removed from Apple’s bill of materials, with the chipmaker likely reaching zero presence in next year’s iPhone models.
Seaport expects high-end Android phones, where Qualcomm has performed best recently, to face the hardest impact from market conditions this year. This carries a double penalty for Qualcomm of reduced or discounted chip sales and lower royalty rates.
The firm noted that Chinese handset makers may focus more on lower-tier products this year, which could favor Mediatek or force Qualcomm to reduce prices. Press reports indicate Qualcomm has already cut prices for some models, with Seaport expecting this to broaden. For deeper analysis of Qualcomm’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available for this and 1,400+ other US equities.
In other recent news, Qualcomm reported mixed financial results for the December 2026 quarter, surpassing expectations but issuing a March guidance that was adversely affected by memory shortages. These shortages particularly impacted Chinese OEMs, leading to reduced supply forecasts. In terms of analyst actions, Piper Sandler reiterated an Overweight rating with a price target of $200. Loop Capital upgraded Qualcomm to a Buy rating from Hold, citing the company’s diversification outlook and recent share price decline. Wells Fargo also upgraded the stock to Equal Weight from Underweight, highlighting Qualcomm’s data center strategy and potential partnerships as key factors. Conversely, BofA Securities initiated coverage with an Underperform rating, pointing to projected sales and earnings growth that lag behind the broader semiconductor sector. The firm noted Qualcomm’s challenges, including an anticipated loss of $7 billion to $8 billion in Apple business. Additionally, Wolfe Research identified Qualcomm as one of the companies with the highest activist attractiveness scores, indicating potential vulnerability to shareholder engagement.
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