Qualcomm Incorporated

Qualcomm Incorporation (NASDAQ: QCOM) designs, develops, and commercializes core technologies that power the global wireless communications industry. The company’s innovations span 3G, 4G, and 5G connectivity, as well as high-performance, energy-efficient computing and on-device artificial intelligence solutions. Qualcomm operates through three primary segments: Qualcomm CDMA Technologies (QCT), which focuses on semiconductor products; Qualcomm Technology Licensing (QTL), which manages its extensive patent portfolio; and Qualcomm Strategic Initiatives (QSI), which handles strategic investments and related activities.

As per previous Kalkine’s Earnings Hunter Report published on ‘QCOM’ on Jun 27, 2025, Kalkine provided an ‘Attractive’ stance on the stock at USD 158.51 based on fundamental analysis and the stock price has now moved up by ~ 13.38% since then.

Noted below are the details of support and resistance levels provided in our previous report:

Rationale:

• Tax Reform Impact and GAAP Losses: Qualcomm’s financial performance in FY2025 was notably impacted by an extraordinary USD 5.7 billion non-cash tax charge arising from the “One Big Beautiful Bill Act”. This adjustment, which required the establishment of a valuation allowance against U.S. federal deferred tax assets, led to a GAAP net loss of USD 3.1 billion in Q4 FY2025 despite strong operational results on a Non-GAAP basis. While management emphasized the long-term benefit of lower effective tax rates, this large accounting loss raises concerns about volatility in future tax obligations and the reliability of deferred tax assets under shifting legislative frameworks.
• Licensing Segment Weakness: The company’s Qualcomm Technology Licensing (QTL) segment continued to exhibit structural weakness, with revenues declining 7% year-over-year and EBT falling 9% in Q4 FY2025. The segment’s EBT margin also slipped from 74% to 72%, reflecting pressure from OEMs seeking to renegotiate royalty agreements and increased regulatory scrutiny surrounding licensing practices. As QTL represents Qualcomm’s high-margin intellectual property arm, sustained declines here could weigh on overall profitability, particularly as the firm faces legal and competitive headwinds in enforcing its patent portfolio.
• Rising Operating Expenses and Margin Constraints: Despite revenue growth across major segments, Qualcomm reported higher operating expenses, with combined Non-GAAP R&D and SG&A costs rising to USD 2.51 billion—above the estimated USD 2.35 billion guidance. Elevated share-based compensation and acquisition-related charges contributed to the overshoot, reflecting cost pressures from talent retention and integration of new businesses like Arduino. While investment in AI and diversification is strategically important, these escalating expenses pose near-term risks to operating leverage and may compress margins if revenue growth moderates.
• Concentration Risks and Geopolitical Exposure: The company remains heavily dependent on a small number of key customers and geographies, particularly within the premium handset market and China. The presentation’s forward-looking statements highlight ongoing risks from U.S.-China trade tensions, supply chain disruptions, and customers’ vertical integration strategies, which could erode Qualcomm’s market share. Additionally, the cyclical nature of the semiconductor industry and intense competition from emerging AI chipmakers underscore the company’s vulnerability to market downturns and pricing pressures, especially as it expands into capital-intensive sectors like data centers and automotive AI.

Valuation (Using Price/Earnings per share Multiple)

Share Price Chart

Conclusion

Qualcomm’s FY2025 results, while strong on a Non-GAAP basis, reveal several underlying weaknesses that temper its growth outlook. The company recorded a significant GAAP net loss due to a USD 5.7 billion non-cash tax charge, exposing vulnerability to shifting U.S. tax legislation. Its licensing segment (QTL) continued to weaken, reflecting declining revenues and profitability amid intensifying legal and competitive pressures. Meanwhile, rising operating expenses from acquisitions, share-based compensation, and R&D spending have begun to weigh on margins. Compounding these issues, Qualcomm remains highly dependent on a few large customers and the Chinese market, making it susceptible to geopolitical risks and industry cyclicality, which could constrain long-term stability and valuation expansion.

Based on the notional gains, valuation downside and price action stance, a "Unattractive" recommendation on Qualcomm Incorporation (NASDAQ: QCOM) has been given at the closing market price of USD 179.72 as on 05 November 2025.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 05 November 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.