Qualcomm (QCOM) made waves last week with an announcement that it will buy Alphawave for $2.4 billion. This strategic acquisition is designed to combine Qualcomm’s artificial intelligence (AI) processor offerings with Alphawave’s wired connectivity solutions. The end result should leave Qualcomm set to dominate data center and edge compute markets amidst the AI revolution. The acquisition provides Alphawave’s shareholders with a 96% premium and speaks to Qualcomm’s zeal for speeding up its expansion beyond smartphones.

It comes as the semiconductor industry is reaching a critical juncture with chipmakers racing to create infrastructure for artificial intelligence, cloud computing, and automotive technologies. Down almost 30% over the past year, the deal will put investors’ faith in Qualcomm to the test.

About Qualcomm Stock

San Diego-based Qualcomm (QCOM) is a dominant semiconductor and wireless technology firm with a $170 billion market capitalization. It has two core business segments. The first is QCT, which is in charge of marketing mobile chips and platforms. The second is QTL, whcich represents its wireless technology patent-licensing segment.

QCOM stock has had a rollercoaster year. It’s off nearly 30% over the past 52 weeks but has rebounded into the green for 2025, up 1.6% year to date. It lags the S&P 500 Index’s ($SPX) performance in both periods. 

Qualcomm is reasonably valued for an established technology company. It is currently priced at a forward price-earnings multiple of 16.8x and a price-sales multiple of 4.47x. However, the PEG multiple of 1.78x indicates minimal near-term upside unless there is an improvement in earnings expansion.

Qualcomm also offers an annual dividend of $3.56 per share with an annual yield of 2.28%. The company returned $2.7 billion to shareholders in its fiscal second quarter through $938 million in dividends and $1.7 billion in buybacks. This reflects its capital-friendly approach.

Qualcomm Beats on Earnings

Qualcomm’s Q2 results surpassed Wall Street estimates. The company posted GAAP EPS of $2.52 and $2.85 on a non-GAAP basis, above the $2.63 consensus estimate. Revenues increased 17% on an annual basis to $11 billion. 

Revenue in its QCT segment came in at $9.5 billion, up 18% year over year. Revenue in its QTL segment was little changed at $1.3 billion. Within the QCT segment, revenues from handsets, automotive, and internet of things were all up. 

Management provided guidance for Q3 of between $9.9 billion and $10.7 billion in revenues and $2.60–$2.80 in adjusted EPS. The midpoint suggests weak sequential expansion as Qualcomm aligns its AI investment with cyclical customer demand.

Aside from revenues, the Alphawave acquisition further enhances Qualcomm’s position in next-generation data centers. Alphawave’s dominance in DSP-based connectivity solutions pairs nicely with Qualcomm’s Snapdragon compute solutions and is expected to generate synergies in AI workloads, high-speed memory interconnects, and low-power edge devices. 

What Do Analysts Expect for Qualcomm Stock?

Sentiment among analysts for Qualcomm is positive. Of the 32 analysts that follow the stock, there is a consensus of “Moderate Buy” rating. This is a vote of confidence on Qualcomm’s recovery from weakness in the mobile segment to diversification based on AI opportunities.

The average price target is $180.96, which implies 15% upside potential. The Street-high estimate of $245 is 57% above the current price level.