It’s certainly been a wild year for Qualcomm (NASDAQ:QCOM). There was an attempted hostile takeover from Broadcom (NASDAQ:AVGO) as well as difficulties with the acquisition of NXP Semiconductors (NASDAQ:NXPI), which stalled because of the U.S.-Chinese trade tensions.

Through all the drama, QCOM stock has eked out a year-to-date return of 6%. And yes, this has meant that the company missed the semiconductor bull run, which has seen operators like Micron Technology (NASDAQ:MU), Advanced Micro Devices (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) post standout returns.

So what now for QCOM stock? Well, it’s true that the valuation is relatively cheap — at least compared to its peers — with a forward price-to-earnings ratio of 16X. The dividend is also an attractive 4.14%.

Yet I still think QCOM is a value trap. The fact is that the company must deal with some tough challenges.

Challenge #1 for QCOM Stock: Mobile Market

Back in the mid-1980s, seven entrepreneurs launched Qualcomm. They had the visionary idea that mobile technologies would revolutionize the communications industry. The strategy was to build a treasure trove of patents, which would be based on global standards.

Of course, it turned out to be spot on, and through the years, the company grew at a hefty rate.

But things are much different now. For the most part, the mobile handset market is mature. Even worse, consumers are starting to delay upgrades of their phones. Let’s face it, phone makers are having a tough time coming up with new must-have features.

Granted, during the latest quarter, there was growth in smartphone sales, but the rate was a mere 1.3%. In fact, according to Gartner, Inc., the forecast is for growth of only about 3% per year from 2018 to 2021.

Challenge #2 for QCOM Stock: U.S.-China Relations

A big wildcard for QCOM stock is the growing tensions between the U.S. and China. President Donald Trump has already lobbed tariffs, and China has not wasted time in retaliating. As for QCOM, the company has 52% exposure to the country.

But the trade issues have already had an impact. After all, the Trump Administration nixed AVGO’s attempted takeover of QCOM on national security grounds. The deal had a price tag of $79 a share. The current price on QCOM stock is $56.

Yet the biggest threat could be the acquisition of NXPI. The deal has received approval from eight governmental authorities — except China. Basically, if QCOM does not get NXPI, it will be a major setback. Keep in mind that NXPI will provide growth opportunities in markets like autos but will also allow for more diversification away from licensing.

Challenge #3 for QCOM Stock: The Business Model

A majority of the QCOM’s business still comes from licensing. Note that the company’s IP (intellectual property) covers core parts of virtually every smartphone.

The problem is that handset manufacturers do not want to pay the heavy royalties. To this end, Apple (NASDAQ:AAPL) has filed a lawsuit and has had its suppliers withhold payments. It also appears that China’s Huawei Technologies has been doing something similar. So during the latest quarter, licensing revenues plunged 44% to $1.26 billion.

But these disputes are not the only problems. Keep in mind that QCOM is the subject of various antitrust actions, such as from South Korea, the EU and the FTC.

In other words, if the company loses some of these cases, the business model could be in jeopardy.

As InvestorPlace contributor Josh Enomoto has noted:

“Any negative impact, no less a paradigm-shifting event, could send QCOM stock spiraling. Again, I don’t think Qualcomm stock would disintegrate, but without licensing, it’s simply not worth its price tag.”

Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.