Overview
Wells Fargo upgraded Qualcomm Inc. (NASDAQ:QCOM) to Equal Weight from Underweight on Monday and increased its price target to $150 from $135. Qualcomm shares are trading at $140.41, down 32% from a 52-week high of $205.95, with a market capitalization of $149.82 billion. The analyst action reflects a more neutral posture toward the chipmaker after a period of caution.
Wells Fargo's Rationale
The firm highlighted Qualcomm’s forthcoming data center strategy and the prospect of announced partnerships as potential sentiment drivers. Wells Fargo expects these moves to attract investor interest, noting the company’s potential to participate in the AI inference market. Based on that market opportunity, the analyst projects Qualcomm could win an annual revenue stream of $5 billion to $7 billion by calendar year 2027 and beyond, contingent on market participation.
Wells Fargo characterizes the relevant addressable market as a $100 billion-plus AI inference opportunity and ties its revenue projection to Qualcomm’s ability to establish a foothold in that segment.
Recent Financials and Valuation
The company reported revenue of $44.87 billion over the last twelve months, representing 10.25% growth. On a valuation basis, Qualcomm is trading at a P/E ratio of 28.55.
Quarterly Results and Guidance
In its December quarter, Qualcomm posted revenue slightly above expectations but provided softer guidance for the March quarter. Management pointed to elevated memory prices that have affected handset production as a factor weighing on near-term results. Qualcomm forecasted March quarter revenue of $10.6 billion, which represents a 13% sequential decline and a 2% year-over-year drop. That guidance falls short of Wall Street’s consensus estimate of $11.1 billion.
On earnings per share, the company guided to $2.55 for the March quarter, a figure that sits $0.35 below analyst expectations.
Analyst Reaction Beyond Wells Fargo
The analyst community has shown divergent views in recent days. Loop Capital upgraded Qualcomm to Buy and set a price target of $185, while Piper Sandler reiterated an Overweight rating with a $200 price target. By contrast, RBC Capital trimmed its price target to $150, noting memory constraints that have influenced Qualcomm’s fiscal outlook. TD Cowen also reduced its price target, moving it to $150 from $190 while maintaining a Buy rating and calling out memory shortages in the smartphone market as a headwind.
Wells Fargo’s new $150 price target represents an 11% increase from its prior $135 target and signals a shift from the firm’s earlier Underweight stance toward a more neutral view.
Implications
The Wells Fargo upgrade centers on Qualcomm’s potential entry into the data center market and the company’s ability to capture a slice of the AI inference market. If Qualcomm can establish partnerships and successfully commercialize relevant processor solutions, the projected multi-billion-dollar revenue opportunity by 2027 would alter investor expectations for the company’s product mix and future growth profile.
Context on Industry Headwinds
At the same time, several analysts have pointed to memory price pressures that have constrained handset assemblies and influenced near-term guidance. These constraints have prompted a range of price-target adjustments across the analyst community, underscoring the mixed sentiment around Qualcomm’s near-term trajectory despite longer-term opportunities in AI inference and data center markets.
Conclusion
Wells Fargo’s upgrade to Equal Weight and higher price target signal a more neutral posture toward Qualcomm driven by the firm’s view of a growing data center and AI inference opportunity. That view sits alongside mixed quarterly results and guidance that reflect memory-driven headwinds in smartphone production. The market and other analysts continue to weigh the near-term impacts of memory shortages against potential longer-term gains from data center participation.