Qualcomm: Long Term Value from Wireless Leadership

Qualcomm is a foundational technology company that plays a key role in how modern devices connect and communicate. Best known for its Snapdragon chips and its ownership of essential wireless patents, Qualcomm helps power smartphones, connected cars, and an expanding range of intelligent devices around the world. As the company moves beyond its traditional reliance on mobile phones into areas such as automotive systems and AI-enabled devices, it is building new growth avenues on top of its existing strengths. The question remains: Does this wireless technology leader deserve a place in your long-term portfolio?

This is not a financial advice. I am not a financial advisor and I only do these post in order to do my own analysis and elaborate about my decisions, especially for my copiers and followers. If you consider investing in any of the ideas I present, you should do your own research or contact a professional financial advisor, as all investing comes with a risk of losing money. You are also more than welcome to copy me. 

For full disclosure, I should mention that I do not own any shares in Qualcomm at the time of writing this analysis. If you would like to copy or view my portfolio, you can find instructions on how to do so here. If you want to purchase shares or fractional shares of Qualcomm, you can do so through eToro. eToro is a highly user-friendly platform that allows you to get started on investing with as little as $50.

The Business

Qualcomm is a global leader in wireless communication technologies. Founded in 1985, the company sits at the core of modern connectivity, supplying both the intellectual property and the silicon that enable smartphones, connected vehicles, and a growing universe of intelligent devices. The company operates through two closely connected businesses. The first designs and sells chips. Qualcomm’s Snapdragon chips combine many functions into a single, power-efficient platform, including computing, graphics, artificial intelligence, and cellular connectivity. These chips are widely used in premium Android smartphones, but Qualcomm has steadily expanded into other areas such as connected cars, in-car entertainment systems, driver assistance features, smart home products, industrial equipment, and edge networking devices. Because these platforms are highly integrated and difficult to design, customers benefit from faster product launches and reliable performance, while Qualcomm benefits from long-term relationships and repeat business. The second part of Qualcomm’s business licenses its intellectual property. Over several decades, the company has developed and patented many of the core technologies used in 3G, 4G, and 5G networks. These patents are essential, meaning that any company making a cellular device must use them. As a result, smartphone and device makers around the world pay Qualcomm royalties for each device they sell. This creates a very stable and high-margin revenue stream that does not depend on whether Qualcomm’s own chips are used in the device. While this licensing model has occasionally attracted regulatory and legal challenges, it remains a central pillar of the company’s profitability. Qualcomm has a strong competitive moat built on its ownership of essential wireless patents and its ability to design highly integrated, power-efficient chip platforms that are difficult for competitors to replicate. The first and most important part of Qualcomm’s moat is its ownership of standard-essential wireless patents. Qualcomm has spent decades contributing core inventions to global cellular standards such as 3G, 4G, and 5G. These technologies are not optional; any company that wants to make a cellular device must use them. This gives Qualcomm structural pricing power and ensures that its licensing business scales with global device volumes, largely independent of which chip supplier a manufacturer chooses. Replicating this position would require not just capital, but decades of participation in standards bodies, deep technical expertise, and global patent coverage, making the barrier to entry exceptionally high. The second pillar of the moat is Qualcomm’s system-level engineering capability. Designing a modern mobile or automotive platform is not about building a single chip, but about tightly integrating computing, graphics, AI acceleration, modems, RF systems, power management, and software into a single, power-efficient solution. Qualcomm’s ability to deliver this integration gives customers faster time-to-market, lower development risk, and optimized performance, which is particularly valuable in premium smartphones and in automotive applications with long design cycles and high reliability requirements. These advantages raise switching costs and make Qualcomm a preferred long-term partner rather than a commoditized component supplier. Crucially, these two advantages reinforce each other. The licensing business funds sustained, high levels of research and development, while Qualcomm’s chip leadership helps validate and commercialize its technologies at scale. This feedback loop strengthens Qualcomm’s influence over future wireless standards and allows it to extend its relevance beyond smartphones into automotive, industrial, and edge computing markets.

Management

Cristiano Amon serves as the CEO of Qualcomm, a role he assumed in 2021 after more than 25 years at the company. He joined Qualcomm in 1995 and steadily rose through the ranks, holding a wide range of senior leadership positions across engineering, product development, and business strategy. Before joining Qualcomm, Cristiano Amon gained industry experience at Vésper, NEC, Ericsson, and Velocom, giving him a global perspective on telecommunications and wireless infrastructure early in his career. Cristiano Amon holds a Bachelor of Science in Electrical Engineering and an honorary doctorate from Universidade Estadual de Campinas in São Paulo, Brazil. He was selected as CEO based on his deep technical expertise, strong execution track record, and long standing relationships across the wireless ecosystem, including handset manufacturers, automotive OEMs, network operators, and technology partners. His appointment reflected Qualcomm’s preference for leaders with deep institutional knowledge and a strong understanding of both technology and industry dynamics. During his tenure as CEO, Cristiano Amon has played a central role in reshaping Qualcomm’s growth strategy beyond its historical reliance on smartphones. He has been instrumental in accelerating the company’s expansion into automotive platforms, Internet of Things applications, and personal computing, while simultaneously strengthening Qualcomm’s leadership position in 5G. Under his leadership, Qualcomm has positioned itself as a system level technology provider rather than a pure handset chip supplier, broadening its addressable markets and long term growth opportunities. Cristiano Amon is known for an energetic, optimistic, and execution focused leadership style. He often quotes racing driver Mario Andretti’s line, “If everything seems under control, you’re just not going fast enough,” reflecting his belief in moving quickly, embracing ambition, and staying ahead of technological change. His leadership has occasionally been compared to that of Satya Nadella at Microsoft, as both leaders spent many years inside their organizations before stepping into the CEO role and driving meaningful strategic transformation. Given his combination of deep technical roots, industry credibility, and clear strategic vision, I believe Cristiano Amon is well positioned to lead Qualcomm through its next phase of evolution as connectivity, artificial intelligence, and intelligent computing continue to expand across industries.

The Numbers

The first number we will look into is the return on invested capital, also known as ROIC. We want to see a 10-year history, with all numbers exceeding 10% in each year. For Qualcomm, ROIC has generally been high over the past decade, reflecting the strength of its business model. A key driver is Qualcomm’s licensing business, which is based on patents that are essential to 3G, 4G, and 5G wireless standards. Because device makers must use these technologies, Qualcomm earns recurring royalty income with relatively little ongoing investment, which naturally supports strong returns. Qualcomm’s chip business also contributes to this profile. As a fabless semiconductor company, it does not own expensive manufacturing facilities, keeping capital requirements low. When demand is healthy and products are competitive, profits can grow without large increases in investment, reinforcing ROIC over time. The few years where ROIC dipped closer to the lower end of the range were driven by temporary factors rather than a weakened business. These included licensing disputes, regulatory pressure, softer smartphone demand, and periods of heavier investment ahead of revenue growth. As these pressures eased and market conditions improved, returns recovered. The improvement seen over the last two fiscal years reflects a rebound in demand, better cost control, and a growing contribution from areas outside smartphones, such as automotive and IoT. These businesses tend to have longer product cycles and more stable relationships, which can support more consistent returns going forward. While it may be unrealistic to expect ROIC to consistently reach the unusually high levels seen at past peaks, Qualcomm’s combination of essential intellectual property and a capital-light chip model makes it reasonable to expect returns to remain comfortably above 10%. This consistency is a strong indicator of business quality and long-term value creation.

The next numbers are the book value + dividend. In my old format this was known as the equity growth rate. It was the most important of the four growth rates I used to use in my analyses, which is why I will continue to use it moving forward. As you are used to see the numbers in percentage, I have decided to share both the numbers and the percentage growth year over year. To put it simply, equity is the part of the company that belongs to its shareholders – like the portion of a house you truly own after paying off part of the mortgage. Growing equity over time means the company is becoming more valuable for its owners. So, when we track book value plus dividends, we’re essentially looking at how much value is being built for shareholders year after year. The sharp drop in equity in fiscal year 2018 was largely the result of exceptional, one-off factors rather than a deterioration in the underlying business. That year coincided with a period of intense disruption, including major legal and regulatory disputes related to Qualcomm’s licensing model and a prolonged conflict with Apple, which temporarily withheld royalty payments. These issues weighed heavily on reported earnings and balance sheet metrics. From fiscal year 2019 onward, equity began to grow consistently as those disputes were resolved, royalty payments normalized, and profitability recovered. The rollout of 5G, combined with strong performance in Qualcomm’s chip business, supported steady earnings and balance sheet improvement. Over this period, equity growth reflected a return to more normal operating conditions and the strength of Qualcomm’s core business model. The decline in equity in fiscal year 2025 is of a very different nature and is not, by itself, a major red flag. It mainly reflects a tougher operating environment, particularly weaker demand in smartphones. Importantly, this decline does not signal structural issues with Qualcomm’s business or a breakdown in profitability, but rather normal volatility tied to cyclical end markets. Looking ahead, equity is likely to continue growing over the long term, although not necessarily in a straight line every year. As demand stabilizes and newer areas such as automotive and IoT contribute a larger share of earnings, Qualcomm should be able to rebuild equity over time. Occasional declines can still occur, especially during weaker cycles, but the overall trajectory is expected to remain positive as long as the company continues to generate solid profits and maintain its strong competitive position.

Finally, we will analyze the free cash flow. Free cash flow, in short, refers to the cash that a company generates after covering its operating expenses and capital expenditures. I use levered free cash flow margin because I believe that margins provide a better understanding of the numbers. Free cash flow yield refers to the amount of free cash flow per share that a company is expected to generate in relation to its market value per share. Free cash flow has generally been strong and resilient over the past decade, which reflects the quality of its business model. A large part of this strength comes from the licensing segment, where royalty income is recurring and requires relatively little ongoing investment once the underlying technology has been developed. In addition, Qualcomm operates a fabless chip model, meaning it does not need to invest heavily in manufacturing facilities. This combination allows a large share of operating profits to turn into cash. Free cash flow has fluctuated over the years, largely in line with cycles in the smartphone market and periods of disruption related to licensing disputes and weaker demand. However, even in less favorable years, Qualcomm has continued to generate substantial cash, highlighting the underlying durability of the business. Fiscal year 2025 stands out because free cash flow reached its highest level ever, alongside one of the strongest margins in the period. This was driven by stronger earnings, disciplined cost control, and better cash generation across the business. Contributions from areas beyond smartphones, such as automotive and IoT, also helped support cash flow, as these businesses tend to have longer-term customer relationships and more stable demand. Looking ahead, free cash flow is expected to remain robust and has room to grow over time. While year-to-year results will still be influenced by cycles in smartphones, the increasing diversification of the business should make cash generation more stable across cycles. As automotive, IoT, and edge computing scale, they should gradually add to the overall cash flow base. Qualcomm primarily uses its free cash flow in three ways. First, it reinvests in research and development to maintain leadership in wireless technologies, on-device AI, and next-generation connectivity. Second, it strengthens the balance sheet and preserves flexibility to navigate industry cycles. Finally, consistent with management’s stated commitment, Qualcomm returns a significant portion of its free cash flow to shareholders through share repurchases and dividends, as highlighted by the near 100% return of free cash flow during fiscal year 2025. The free cash flow yield suggests that Qualcomm is trading at its most attractive valuation levels in the past decade. However, valuation will be revisited later in the analysis.

Debt

Another important aspect to consider is the level of debt. A useful way to assess whether debt is manageable is to look at how many years it would take a company to repay it using its earnings. As a rule of thumb, debt that can be repaid within three years is generally considered manageable.  Based on reported numbers, Qualcomm could repay its long-term debt in 2,75 years, which is comfortably below the three-year threshold. This suggests that debt is not a concern for investors. It is important to note, however, that this calculation is based on GAAP earnings, which were unusually low in fiscal year 2025 due to a one-off tax charge related to the “One Big Beautiful” tax bill. If that one-time item is excluded and earnings are viewed on a more normal basis, Qualcomm could repay its debt in 1,15 years, highlighting an even stronger position. Looking back, Qualcomm has not had a debt-to-earnings level above three years since 2019, reinforcing the view that debt management has been conservative and well controlled. Management has also consistently emphasized the importance of maintaining a strong balance sheet.

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Risks

Relying heavily on a few key customers is a risk for Qualcomm because a meaningful share of its revenue is tied to a small number of large device makers, particularly in the premium smartphone segment. When revenue is concentrated in this way, changes in the behavior, strategy, or performance of just one or two customers can have an outsized impact on the company’s results. A core part of this risk comes from customer concentration at the top end of the smartphone market. Qualcomm derives a significant portion of its chip and licensing revenue from premium-tier devices, where a handful of manufacturers dominate global volumes. If demand for these high-end phones weakens, or if market share shifts toward companies that rely less on Qualcomm’s products, revenue and profitability can be affected quickly. This risk is amplified by the fact that several of Qualcomm’s largest customers are actively working to reduce their dependence on external suppliers. The most prominent example is Apple, which is developing its own modem chips as part of a broader effort to control more of its supply chain. While Qualcomm currently supplies modems for the iPhone, Apple has signaled that it intends to transition away from Qualcomm’s modems over time, with analysts widely expecting a full phase-out to occur around 2027. If this transition is successful, Qualcomm would gradually lose one of its most important customers. This would be particularly impactful because premium-tier modem products tend to carry higher margins than lower-end alternatives, meaning the revenue at risk is not only large, but also disproportionately profitable. Another layer of risk comes from how closely Qualcomm’s results are tied to its customers’ product cycles. Revenue can fluctuate depending on the timing and success of major device launches, which are outside Qualcomm’s control. Even temporary delays in customer orders can shift revenue between periods and introduce volatility.

The China risk is a significant factor for Qualcomm because a very large share of its business is tied to customers whose devices are made, sold, or licensed in China, and this exposure sits at the center of ongoing geopolitical tension between the United States and China. In fiscal year 2025, roughly 46% of Qualcomm’s revenue was linked to China, including sales to Chinese OEMs as well as sales to non Chinese manufacturers that sell their devices into the Chinese market. This makes China Qualcomm’s single most important regional exposure and means that developments in this market can have an outsized impact on overall results. One source of risk is China’s long term push for semiconductor self sufficiency. Through industrial policies and incentives, the Chinese government encourages local companies to reduce reliance on foreign technology suppliers. As a result, some Chinese OEMs have already developed, and others may continue to develop, their own chips or switch to alternative suppliers. If this trend accelerates, Qualcomm could see lower demand for both its chip products and its licensed technologies, especially in smartphones, where competition is already intense. Geopolitical tension adds another layer of uncertainty. Trade restrictions, export controls, and national security policies can directly limit Qualcomm’s ability to sell certain products to Chinese customers. A clear example is the revocation of Qualcomm’s export license to sell specific chips to Huawei, which effectively removed revenue from one of China’s largest smartphone makers. Similar actions in the future, whether from the United States or in response from China, could further restrict Qualcomm’s access to customers or markets with little warning. Market dynamics in China also matter. If Chinese brands regain share using their own or alternative technologies, or if consumers increasingly shift toward lower priced or refurbished devices, demand for Qualcomm’s premium tier products could weaken. Since these higher end products contribute disproportionately to profitability, even modest shifts in demand can have a noticeable financial impact.

Macroeconomic factors represent a meaningful risk for Qualcomm because the company operates in the semiconductor industry, which is inherently cyclical and closely tied to global economic conditions. Demand for semiconductors tends to rise and fall with consumer confidence, business investment, and overall economic growth. When the global economy slows, demand for end products such as smartphones, connected devices, and vehicles often weakens, and this reduced demand flows directly through to Qualcomm and its customers. During economic downturns, the semiconductor industry typically experiences sharp swings in demand, excess inventories, and pricing pressure. Customers may delay product launches, scale back production, or work through existing inventory rather than ordering new chips. For Qualcomm, this can lead to lower chip volumes, weaker pricing, and less predictable results, even if the company’s technology remains competitive. Because product life cycles in semiconductors are relatively short, periods of weak demand can have an immediate impact on revenue and profitability. Inflation is another macroeconomic risk. Rising costs, including wages and supply-related expenses, can pressure profitability if they cannot be fully offset through pricing. At the same time, higher prices for consumer electronics can discourage upgrades, especially in discretionary categories like smartphones. If consumers hold on to their devices longer or increasingly choose refurbished or lower-cost options, demand for new, premium-tier devices may weaken, which is particularly relevant for Qualcomm given the importance of higher-end products to its business. Finally, Qualcomm’s diversification into areas such as automotive and IoT, while strategically sound, is also influenced by macroeconomic conditions. The pace of electric vehicle adoption, infrastructure investment, and enterprise spending on connected devices can slow during periods of economic uncertainty. As a result, while diversification helps reduce reliance on smartphones over time, it does not fully insulate the company from broader economic cycles.

Reasons to invest

Premium Android phones is a reason to invest in Qualcomm because this part of the smartphone market is growing structurally and plays directly to Qualcomm’s strongest capabilities. Even though global smartphone unit volumes remain below pre-pandemic levels and the overall handset market is relatively flat, the premium segment within Android continues to expand. Consumers are buying fewer basic phones and increasingly choosing high-end devices with more computing power, better graphics, stronger AI capabilities, and advanced connectivity. This shift allows Qualcomm to grow revenue and earnings even without overall market growth. Qualcomm is uniquely positioned to benefit from this trend through its Snapdragon premium-tier chips. These chips sit at the heart of flagship Android devices and become more valuable each year as phones demand more performance. As premium devices add more processing power, AI features, and advanced functionality, Qualcomm earns more content per phone, higher average selling prices, and stronger margins. This explains why Qualcomm’s Android business has continued to grow despite a flat handset market. Growth in premium Android is also broad-based geographically. While premium phones were once mainly a developed-market phenomenon, this trend is now spreading to regions like China and India. Even in historically price-sensitive markets, consumers are increasingly upgrading to higher-end devices. Since Android accounts for the vast majority of global smartphone volumes, even a gradual shift toward premium devices creates a large and durable growth opportunity for Qualcomm. Another important advantage is Qualcomm’s execution discipline. The company delivers a new premium Snapdragon platform every year on a predictable cadence, maintaining performance leadership in a market that is unforgiving of delays or missteps. Designing, launching, and scaling a flagship mobile chip requires deep experience, fast execution, and the ability to ramp production almost immediately. Qualcomm’s long track record in this environment makes it difficult for competitors or customers to replicate its role at the top of the Android ecosystem.

AI devices is a reason to invest in Qualcomm because the company is emerging as a central technology provider for a new category of personal computing devices that sits beyond smartphones and plays directly to Qualcomm’s strengths in low-power computing, on-device AI, and connectivity. As artificial intelligence changes how people interact with technology, devices such as smart glasses, wearables, and hearables are evolving into always-on personal AI companions. These devices are designed to connect users directly to AI agents that can see, hear, understand context, and take action in real time. This market has recently reached an inflection point, driven by strong consumer adoption, particularly in AI-powered smart glasses. Qualcomm is already deeply embedded in this emerging ecosystem. Its Snapdragon platforms power a growing number of AI devices from major partners, including Meta, which has launched multiple Snapdragon-powered smart glasses models, and Samsung, which recently introduced Galaxy XR, the first device built for Google’s Android XR operating system. Qualcomm currently has around 30 AI device designs either in production or development with global partners, highlighting both early leadership and strong momentum. What makes this opportunity particularly attractive is that it is not limited to a single device type. While smart glasses appear to be the most promising early use case, Qualcomm is designing platforms for a wide range of personal AI devices, including watches, audio devices, and mixed-reality headsets. These devices share common requirements: they need powerful on-device AI to respond instantly to users, ultra-low power consumption to be wearable all day, and constant connectivity to the cloud. Qualcomm has spent decades optimizing exactly these capabilities. A key advantage for Qualcomm is how AI workloads are split between the device and the cloud. Many AI interactions, such as voice commands, visual recognition, and contextual awareness, must happen directly on the device to avoid delays. This requires specialized chips that can run AI models efficiently at low power. At the same time, these devices rely heavily on wireless connectivity to access larger models and cloud services. Qualcomm’s ability to combine on-device AI processing with leading connectivity gives it a strong position as AI computing moves closer to the user.

Automotive is a reason to invest in Qualcomm because the company has positioned itself at the center of the automotive industry’s shift toward software-defined, connected, and increasingly autonomous vehicles. What was once a niche business for Qualcomm has become one of its fastest-growing and most strategically important segments. The growth itself is already visible in the numbers. Automotive revenue grew 36% year over year in fiscal 2025. This growth is not driven by short-term cycles, but by long design cycles and long-term commitments from automakers, which gives the business durability and visibility that is very different from consumer electronics. A major milestone was the launch of Snapdragon Ride Pilot, Qualcomm’s first full-system solution for advanced driver assistance. Developed closely with BMW, it debuted in the BMW iX3 and enables hands-free highway driving and urban navigation. Importantly, this is not a one-off project. The system is designed to be broadly compatible across automakers and is already validated in dozens of countries, with global coverage expanding further. As more cars equipped with these systems reach the road, automakers gain confidence in Qualcomm’s technology, which helps convert future design wins into revenue. Qualcomm’s broader automotive offering, the Snapdragon Digital Chassis, has effectively become an industry platform. It combines connectivity, digital cockpit, driver assistance, and AI into a single, scalable architecture. This allows automakers to consolidate hardware, simplify development, and update features through software over time. As vehicles increasingly move toward centralized computing rather than dozens of separate electronic units, Qualcomm’s system-level approach becomes more valuable. Another key strength is Qualcomm’s position as a neutral, global partner. Automakers generally prefer flexible platforms that can work across regions, brands, and software ecosystems rather than tightly controlled, vertically integrated solutions. Qualcomm’s model fits this preference well, which is why it has built relationships with a wide range of manufacturers and continues to see a growing pipeline of future vehicle programs. Finally, automotive is attractive because of its long-term nature. Once a chip platform is designed into a vehicle, it typically remains there for many years. As more vehicles with Qualcomm technology enter production, revenue builds gradually but predictably over time.

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Valuation

Now it is time to calculate the share price. I perform three different calculations that I learned at a Phil Town seminar. If you want to make the calculations yourself for this or other stocks, you can do so through the tools page on my website, where you have access to all three calculators for free.

The first is called the Margin of Safety price, which is calculated based on earnings per share (EPS), estimated future EPS growth, and estimated future price-to-earnings ratio (P/E). The minimum acceptable rate of return is 15%. I chose to use an EPS of 12,03, which is the non-GAAP EPS from the fiscal year 2025. I have selected a projected future EPS growth rate of 13% (Finbox expects EPS to grow by 13%). Additionally, I have selected a projected future P/E ratio of 26, which is double the growth rate. This decision is based on the historical higher P/E ratio of Qualcomm. Lastly, our minimum acceptable rate of return is already set at 15%. After performing the calculations, we determined the sticker price (also known as fair value or intrinsic value) to be $262,45. We want to have a margin of safety of 50%, so we will divide it by 2. This means that we want to buy Qualcomm at a price of $131,22 (or lower, obviously) if we use the Margin of Safety price.

The second calculation is called the Ten Cap price. The rate of return that a company owner (or stockholder) receives on the purchase price of the company is essentially its return on investment. The expected annual return should be at least 10%. I calculated it as follows: The operating cash flow last year was 14.012 and capital expenditures were 1.192. I tried to review their annual report to calculate the proportion of capital expenditures designated for maintenance. I couldn't find it, but as a rule of thumb, you can expect that 70% of the capital expenditures will be allocated to maintenance purposes. This means that we will use 834 in our calculations. The tax provision was 1.422. We have 1.074 outstanding shares. Hence, the calculation will be as follows: (14.012 – 834 + 1.422) / 1.074 x 10 = $135,94 in Ten Cap price.

The final calculation is referred to as the Payback Time price. It is a calculation based on the free cash flow per share. With Qualcomm's Free Cash Flow Per Share at $11,94 and a growth rate of 13%, if you want to recoup your investment in 8 years, the Payback Time price is $172,12.

Conclusion

I believe Qualcomm is a great company with strong management and a durable business model. The company has built its moat through ownership of essential wireless patents and its ability to design highly integrated, power-efficient chip platforms that are difficult for competitors to replicate. This is reflected in consistently high ROIC, which have improved over the past two years, as well as record free cash flow generation in fiscal year 2025. At the same time, relying heavily on a few key customers remains a risk, as a large share of revenue comes from a small number of premium smartphone makers, meaning changes in their demand, product cycles, or strategic decisions can quickly impact results. This risk is heightened by the fact that some major customers, most notably Apple, are working to replace Qualcomm’s components with in-house solutions, putting a disproportionately profitable source of revenue at risk over time. The China risk is also significant, as nearly half of Qualcomm’s revenue is tied to devices made or sold in China, leaving results highly sensitive to geopolitical tensions, trade restrictions, and policy decisions. China’s push for semiconductor self-sufficiency and the possibility of further export controls or customer shifts toward local alternatives could reduce demand for Qualcomm’s products, particularly in the premium smartphone segment. Macroeconomic factors add another layer of risk, since demand for Qualcomm’s products is closely linked to global economic conditions, with slowdowns leading consumers and businesses to delay device upgrades and investment, increasing earnings volatility even when the underlying technology remains competitive. On the opportunity side, premium Android phones remain a key reason to invest, as the high-end Android segment continues to grow despite flat overall smartphone volumes, allowing Qualcomm to increase revenue and earnings through richer chip content per device and rising performance requirements across global markets, including emerging regions. AI devices are another compelling growth driver, as Qualcomm is becoming a core platform provider for emerging personal AI hardware such as smart glasses and wearables, where low-power on-device AI and constant connectivity are essential and where early adoption suggests a large, multi-year opportunity. Automotive further strengthens the investment case, as Qualcomm has become a key technology partner in the shift toward software-defined and increasingly autonomous vehicles, with fast-growing revenue, long design cycles, and multi-year vehicle programs supporting more predictable and higher-quality growth. Taken together, I believe Qualcomm combines a strong moat with attractive long-term growth opportunities, and buying shares at a margin of safety price of $131 could be a good long-term investment.

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