Loop Capital moved Qualcomm Inc. (NASDAQ: QCOM) to a Buy rating from Hold on Monday and assigned a $185 price target, citing a set of factors that influenced the upgrade.
Analyst Gary Mobley pointed to the companys pullback in market value this year as one reason for the change in stance. Loop Capital noted that Qualcomms share price has declined around 20% year-to-date; data in the market snapshot shows a 17.9% year-to-date fall, with the stock trading at $140.41 compared with a 52-week high of $205.95.
The firms analysis, as noted in related research, indicates Qualcomm may be undervalued at current levels, implying potential upside for investors if the companys diversification plan gains traction. Loop Capital also observed that Qualcomm has lagged the broader chip sector on multiple horizons - year-to-date, one-year, three-year and five-year performance metrics.
Loop Capital outlined expectations for the handset market and company-specific customer dynamics. The firm believes the smartphone market should begin to recover as memory chip supply constraints ease. It expects Qualcomms sales to Samsung to stabilize at roughly a 75% share by this time next year, versus a step-down from a 100% share position this year.
On Apple exposure, Loop Capital projects Qualcomms chip shipments to Apple will drop to under 10% of total revenue by this time next year, excluding patent license revenue collected from Apple. The analyst firm highlighted that investor confidence would be strengthened if Qualcomms fiscal 2029 revenue from Automotive and IoT segments approaches or exceeds Handset revenue for the first time - a milestone the firm described as central to the stocks prospective rerating.
Despite the upgrade, Loop Capital emphasized that Qualcomm is not yet a beneficiary of data center AI trends. That qualification underscores that the firms positive view rests on diversification across Automotive and IoT rather than immediate gains from AI-focused data center demand.
Recent company results and guidance provide context for Loop Capitals view. Qualcomm reported first-quarter fiscal 2026 earnings per share of $3.50, beating the $3.40 forecast. Revenue for the quarter came in at $12.25 billion, above the $12.11 billion expectation.
However, managements guidance for the March quarter reflected the impact of memory shortages. Qualcomm projected revenue of $10.6 billion for the March quarter, a figure that is 5% below Wall Streets consensus estimate of $11.1 billion. The companys EPS guidance of $2.55 missed analysts expectations by $0.35.
The mix of stronger-than-expected quarterly results and weaker near-term guidance has drawn varied reactions from other analysts. Piper Sandler reiterated an Overweight rating with a $200 price target. RBC Capital and TD Cowen both reduced their price targets to $150, citing memory constraints that have affected smartphone production. RBC retained a Sector Perform rating while TD Cowen continued to carry a Buy rating, acknowledging the companys diversification efforts even as headwinds persist.
The firm noted that investors tracking Qualcomms trajectory should watch both the pace of recovery in handset demand as memory shortages ease and the evolution of revenue contributions from Automotive and IoT. Those shifts will be central to whether sentiment toward the company improves materially as Loop Capital anticipates.
Qualcomms market capitalization was referenced at $149.82 billion in firm commentary describing the companys scale within the semiconductor industry.