No matter what you’re looking for as an investor, Qualcomm (NASDAQ:QCOM) can bring it to you on a silver platter. Maybe you want portfolio exposure to the high-conviction market for generative artificial intelligence (AI)-compatible hardware. Or, perhaps you’d like to find a company with a stellar earnings track record, strong growth potential, good value and generous dividends. QCOM stock can provide all of these and more.
Granted, Qualcomm isn’t a FAANG company or a member of the elite group of “Magnificent Seven” tech titans. Yet, there are numerous reasons to invest in Qualcomm before 2023 is over. You’ll thank me someday after collecting those delicious dividend payments and watching the stock move much higher in the coming quarters.
QCOM Stock Offers the Best of Everything
I rarely say this, but QCOM stock might be one of my most confident picks ever. What’s not to like about this stock? For one thing, Qualcomm pays a forward annual dividend yield of 2.58%, which is quite good for a technology company. For comparison, the average dividend yield in the tech sector is just 1.025%.
Meanwhile, Qualcomm’s GAAP-measured trailing-12-month price-to-earnings (P/E) ratio is 18x. Since the sector median P/E ratio is 23.34x, Qualcomm’s investors are getting a relatively good value.
Furthermore, Qualcomm has an absolutely stellar track record of quarterly EPS beats. The company knocked it out of the park once again with its most recently released earnings results — but more on that topic in a moment.
And by the way, I understand that technology companies in 2023 have to meet investors’ demands for AI market exposure. Qualcomm addressed this demand when the company introduced a smartphone platform, known as the Snapdragon 8 Gen 3, not long ago.
The Snapdragon 8 Gen 3’s core focus is to accommodate data-intensive generative AI applications. It’s a powerful smartphone platform that can be integrated into a broad variety of mobile devices.
Qualcomm’s Results Point to Smartphone Recovery in China
Furthermore, Qualcomm posted a third-quarter 2023 earnings beat that should impress skeptical investors. In particular, Wall Street expected Qualcomm to report EPS of $1.91 but the actual result was $2.02.
KeyBanc analyst John Vinh observed “stabilizing Android demand, with inventory destocking largely behind [it].” Vinh, who maintained an “overweight” rating and a $145 price target on QCOM stock, was encouraged by the “expectation of continued strength in demand for Android smartphones, particularly in China,” according to a Barron’s report.
In a similar vein, a report from Counterpoint Research suggested that China’s smartphone market “may be closer to bottoming out.” Moreover, Qualcomm’s finance chief, Akash Palkhiwala, sees “early signs of stabilisation in demand for global 3G, 4G [and] 5G handsets.”
This is all quite encouraging, as China’s smartphone market is a significant revenue source for Qualcomm. Going forward, Qualcomm’s investors should keep tabs on trends and developments in the tech gadget and component market in China and elsewhere.
QCOM Stock: There’s Something for Everyone, Including You
Qualcomm offers growth potential and decent value, as well as earnings beats, consistent dividend payouts and AI market exposure. What more could anyone possibly ask for?
Besides, Qualcomm should benefit if China’s mobile phone market stages a recovery in 2024. So, there are plenty of reasons to buy QCOM stock right now, before it’s too late and the price is much higher.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
