Qualcomm (NASDAQ:QCOM) is a leading player in mobile connectivity, focused on developing key wireless technologies for smartphones and networks. QCOM stock operates in three primary business segments: chipsets and software, intellectual property licensing, and investment in 5G and AI technologies. 

You can see the company’s dedication to innovation via the Snapdragon 8 Gen 3 platform, which powers the OnePLus 12. The company’s Q1 2024 results also cement Qualcomm among the best semiconductor stocks worth considering.

Of course, given the rise many of its chip peers have seen, Qualcomm has underperformed on a relative basis. But here’s why I think investors shouldn’t overlook the stock.

Recent Earnings Beat Expectations

Thanks to a 16% increase in sales of mobile chips, Qualcomm’s fiscal Q1 profits came in well above where analysts expected. Despite this, QCOM stock dipped more than 1% on the news. The company forecasted revenue for its current quarter of between $8.9 billion to $9.7 billion. This is less than the average forecast. Additionally, adjusted earnings are expected to come in between 93 cents and $1.73 per share, also below estimates.

So, there’s a bit of a conundrum investors have here. Qualcomm has performed well in the past, but its future outlook and growth prospects don’t appear to jive with what Wall Street is expecting.

Could the company be sandbagging its results? Possibly. At least from a profitability perspective, I think the company is likely to beat expectations. That’s based on the company’s previous quarterly results, which saw net income surge 24% year-over-year to $2.77 billion. If AI tailwinds take hold, this profit number could come in even higher (most investors know how profitable AI-related hardware is right now).

Next-Generation AI Smartphones

With the rumored integration of LPDDR6, Qualcomm Inc.’s Snapdragon 8 Gen 4 chipset may be a trailblazer in AI-focused memory technology. This chipset is set to hit shelves in October and power upcoming Android flagships like the OnePLus 13 and Samsung Galaxy S25.

Benchmarks of Qualcomm’s upcoming flagship chipset that have leaked indicate that it performs better than Apple’s projected iPhone 16 with the A18 Bionic chipset.

As market trends and smartphone sales decreased, facing a downturn, the 5G upgrade cycle also slowed, reflecting overall market patterns in Qualcomm sock. Qualcomm is still dedicated to generative AI, though. CEO Amon spotlighted the potential of the Snapdragon 8 Gen 3 chip, which enhances CPUs, GPUs, and Qualcomm Spectra technology for AI-enhanced pictures and supports models going up to 10 billion parameters.

QCOM Stock Is Worth the Money

Qualcomm continues to compete with some of the most notable mega-cap stocks out there. But in large part, I’d venture to say this company is overlooked. The smartphone and connectivity markets aren’t what’s in vogue right now, and everyone is focused on AI. That said, I do think Qualcomm has some sneaky AI opportunities that are clearly not being valued by the market at all (given the stock trades around 23-times earnings).

Accordingly, I think this stock has plenty of room to run. Even if revenue and earnings growth slows somewhat, I still think the company has room to exceed its lowered bar of expectations. Thus, as a long-term holding, I think QCOM stock is worth a buy at current levels.

On the date of publication, Chris MacDonald 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.