Qualcomm (QCOM, Financial) has been added to J.P. Morgan's positive catalyst watchlist ahead of its first-quarter earnings announcement. Analyst Samik Chatterjee has maintained an "overweight" rating on the stock, setting a price target of $200. Chatterjee believes that Qualcomm's earnings performance is strong, which may help alleviate concerns about potential revenue declines from Apple (AAPL) in the coming years, although this may be temporary.
One key positive factor is the robust growth in the Chinese smartphone market, where Qualcomm holds significant opportunities, impacting major players like Apple and Samsung. Additionally, recent government subsidies could drive device upgrades, further contributing to Qualcomm's growth.
Chatterjee also highlights potential gains from the Samsung Galaxy S25 smartphone and a shift in investor focus from Apple-related revenue losses to Qualcomm's strong content-driven factors. These factors are driven by higher silicon content supporting AI functions on high-end devices.
Chatterjee explains that revenue is expected to return to double-digit growth, supported by diverse end markets. This growth could lead to a reevaluation of Qualcomm's price-to-earnings ratio, which remains at a moderate level of 14x, or mid-to-high when excluding Apple's contribution to QCT revenue.
