NEW YORK - Qualcomm (NASDAQ:QCOM) Incorporated (NASDAQ: QCOM), a leader in connected computing, has announced its strategy to target an expanded total addressable market (TAM) of approximately $900 billion by 2030. This move is a result of the company's focus on diversification and its leading technology roadmap, revealed during its 2024 Investor Day.
The company is poised to capitalize on the growing demand for connected edge devices, projecting over 50 billion cumulative shipments from this year through 2030. Qualcomm's President & CEO, Cristiano Amon, emphasized the company's strengthened growth profile and the role of generative AI in boosting demand across various industries, positioning Qualcomm to tap into this substantial market opportunity.
Qualcomm has set new five-year financial goals for its QCT business, aiming for combined revenues of $22 billion by FY29. This includes a revenue target of $8 billion in the automotive sector, $14 billion from the Internet of Things (IoT), and significant growth in PC, industrial, and extended reality (XR) sectors, each expected to reach $4 billion in revenues by FY29, with the rest of the IoT segment contributing to the same figure.
The company's leadership, including CFO and COO Akash Palkhiwala and other top executives, outlined the opportunities for diversification during the event. They highlighted Qualcomm's traction in various markets and the potential for further expansion.
Qualcomm's plans reflect its continuous innovation in intelligent computing and its nearly 40-year history of setting industry standards. The company's Snapdragon-branded platforms are known for powering exceptional consumer experiences, and it has a significant patent portfolio under its licensing business, QTL.
The forward-looking statements made by Qualcomm are subject to risks and uncertainties, including factors such as customer concentration, vertical integration by customers, geopolitical tensions, and the ability to extend technologies into new product areas and industries. These factors could materially affect the company's actual results compared to its projections.
This news article is based on a press release statement from Qualcomm Incorporated. The information provided reflects the company's current expectations and market opportunities as outlined during their Investor Day.
In other recent news, Qualcomm Incorporated reported strong fourth-quarter and fiscal year 2024 results, with non-GAAP revenues of $10.2 billion and earnings per share (EPS) of $2.69. The chipset segment contributed $8.7 billion in revenues, while the licensing segment brought in $1.5 billion. Qualcomm's position in the automotive market was underscored by record revenues of $899 million, marking a substantial year-over-year increase. The company returned $2.2 billion to shareholders through buybacks and dividends, with forecasts for Q1 FY25 revenues between $10.5 billion and $11.3 billion.
Loop Capital initiated coverage on shares of Qualcomm, assigning a Hold rating and setting a price target of $180. The firm highlighted the need for revenue diversification for Qualcomm, in light of challenges such as Apple (NASDAQ:AAPL)'s shift towards using its own baseband modem technology and a maturing smartphone market. Qualcomm has made strides in diversifying its revenue streams, particularly by expanding into the automotive sector, which now represents a high single-digit percentage of the company's total revenue.
The company's diversification into markets including IoT, automotive, and XR, has positioned it for continued growth. However, Qualcomm anticipates a share reduction by 2026 due to a large customer potentially moving internal. These are the recent developments from Qualcomm.
InvestingPro Insights
Qualcomm's ambitious strategy to target a $900 billion market by 2030 is supported by several key financial indicators and analyst insights. According to InvestingPro data, Qualcomm's revenue growth has been robust, with a 18.69% increase in the most recent quarter. This growth trajectory aligns well with the company's expansive market goals.
InvestingPro Tips highlight that Qualcomm is trading at a low P/E ratio relative to its near-term earnings growth, with a current P/E ratio of 18.11. This suggests that the stock may be undervalued considering its growth prospects. Additionally, the company's PEG ratio of 0.46 further supports this view, indicating that Qualcomm's stock price may not fully reflect its expected earnings growth.
The company's financial health appears solid, with InvestingPro data showing that liquid assets exceed short-term obligations, and the company operates with a moderate level of debt. This financial stability provides Qualcomm with the flexibility to invest in the new markets it's targeting, particularly in automotive and IoT sectors.
Qualcomm's dividend policy also stands out, with InvestingPro Tips noting that the company has raised its dividend for 22 consecutive years. The current dividend yield of 2.07% may attract income-focused investors while the company pursues its growth strategy.
It's worth noting that 19 analysts have revised their earnings upwards for the upcoming period, suggesting growing confidence in Qualcomm's near-term performance. This positive sentiment aligns with the company's ambitious revenue targets across various segments.
For investors seeking a deeper understanding of Qualcomm's potential, InvestingPro offers 11 additional tips that could provide valuable insights into the company's prospects as it aims to capitalize on the expanding connected edge device market.
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