Qualcomm's new forecasts after Investor Day met with a lack of the enthusiasm from the market 📉

Qualcomm (QCOM.US) held an Investor Day yesterday. At the conference, the company presented its forecasts for the coming years, as well as hinted at its operational projections in the new post-election environment. Despite growth forecasts in key segments, one can somewhat feel that the company's projections for its most growth-oriented sectors remain quite cautious, raising questions about the technology company's possible future growth on the wave of increased demand for AI. 

The company has highlighted its planned diversification in the Internet of Things (IoT) segment. Qualcomm plans to significantly move beyond the smartphone segment and aims for 50% of its business exposure to be in segments other than smartphones by 2030. Currently, 64% of the company's revenue depends on the smartphone segment. The decision to diversify revenue sources into other sectors remains a positive signal of the company's proactive measures against potential over-concentration.

Qualcomm anticipates generating $22 billion from segments such as laptops, automotive products, and other markets beyond the dominant smartphone segment over the next 5 years.

Despite bold revenue and diversification plans, investor concerns may be linked to the company's failure to meet previous forecasts from 2021, which casts doubt on the effectiveness of the presented plans.

The company emphasizes that it does not expect significant risks associated with the new administration in the USA and also notes a positive attitude towards cooperation with Trump. However, the future of the company remains uncertain in the event of a potential escalation in US-China relations, as Qualcomm still has strong exposure to the Chinese market.

The company remains heavily dependent on large tech companies, including Apple, which has announced plans to partially transition to in-house production of key chips in the coming years, which could significantly impact Qualcomm.

Qualcomm chart (1D)

Despite the positive tone of Investor Day, the market views the company with some concern, especially in the context of Nvidia's upcoming results. Qualcomm's stock is down over 5%, falling below the lower boundary of the sideways trend it has been in since early August. The next support level is the local low from August 5th at $151. Investors should focus on this level, as dropping below this value could be interpreted as confirmation of exiting the sideways trend.

Source: xStation