Qualcomm Seen Missing AI Gains, Gets Rating Cut by KeyBanc

Qualcomm used to look like an edge AI play thanks to its position in handsets and PCs, but since these end markets haven’t yet materialized meaningfully, it isn’t seen benefiting from a replacement cycle or getting a market premium until that happens, KeyBanc Capital Markets says in a note, cutting its rating on the stock to sector weight. Apple is seen ramping up its internal modem in stages in coming years, and this could be tough to overcome, with full impact of the modem coming out representing a $1.55-$1.65 headwind to earnings, KeyBanc adds. In addition, price competition means Qualcomm will start to lose market share to Mediatek in mid-to-low-end smartphones. Qualcomm shares rise 0.3% at $167.42.

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