Anti-trust fines levied on Qualcomm (NASDAQ: QCOM) continue to give its investors a cause for worry. But at a 15x forward P/E, an NXP Semiconductor buyout, and plenty of cash on hand, Qualcomm’s business is starting to show stability.
Qualcomm is not sitting still as it awaits judgment on its royalty rates for its mobile chip IP. On October 17, the company showed off its 5G data connection. 5G is the next phase of high-speed networks in the mobile space. Even though 5G is a standard most applicable to IoT, the growth in IoT solutions cannot be ignored. Qualcomm’s success here underlines the company’s lead in mobile networking.
The mobile chip supplier will continue to dominate the smartphone space. Its Snapdragon 835 is the processor that high-end phone-makers use. Samsung’s S8 uses this 10nm chip, choosing it because of the small size, power efficiency, and lower heat output. OnePlus, Pixel 2, and others all have an 835 chip. So even as QCOM stock is range-bound due to litigation uncertainties, Qualcomm will very likely report spectacular revenue growth in the quarters ahead. Of course, it will exclude any Apple royalties owed and even forecast lower royalty rates just in case.
