Subscribed! How do you view QCOM multiple and earnings growth potential if they get a foothold in AI hardware? Is this still a phone play or a broader AI hardware play? Thanks.
I think it's clear they will gain incremental pricing and phone share with their AI hardware. They continue to diversify their business - IOT (This could be a significant AI beneficiary), Auto should continue to grow. In the near term, this will still be a phone company. In 5 years, phones will still matter, but won't dominate the business like it does today. The valuation is fine. They aren't this high GM business like AMD/NVDA, so it won't fetch the valuation these companies have. 20-23x for a company growing EPS 10%+ for several years is about where I'd expect them to trade. The recent pullback makes this more attractive than a month or so ago.
Thanks for the insights! With such a high percentage of revenue still coming from phones, one would hope that they develop AI features that spur an upgrade cycle (and price increases). It does feel like they need more diversification, although I like what I see in the laptop space now (leading battery life and good AI-enabled hardware).
Subscribed! How do you view QCOM multiple and earnings growth potential if they get a foothold in AI hardware? Is this still a phone play or a broader AI hardware play? Thanks.
I think it's clear they will gain incremental pricing and phone share with their AI hardware. They continue to diversify their business - IOT (This could be a significant AI beneficiary), Auto should continue to grow. In the near term, this will still be a phone company. In 5 years, phones will still matter, but won't dominate the business like it does today. The valuation is fine. They aren't this high GM business like AMD/NVDA, so it won't fetch the valuation these companies have. 20-23x for a company growing EPS 10%+ for several years is about where I'd expect them to trade. The recent pullback makes this more attractive than a month or so ago.
Thanks for the insights! With such a high percentage of revenue still coming from phones, one would hope that they develop AI features that spur an upgrade cycle (and price increases). It does feel like they need more diversification, although I like what I see in the laptop space now (leading battery life and good AI-enabled hardware).