The most obvious artificial intelligence processor play is, of course, Nvidia (NASDAQ:NVDA) stock. Maybe you already have enough Nvidia shares. I encourage you to take a look at Qualcomm (NASDAQ:QCOM). Right now, Qualcomm stock is definitely not over-valued and will soon have a chance to impress Wall Street.
That’s because a major event is imminent – but more about that in a moment. Truly, Qualcomm is the AI-processor manufacturer not named Nvidia that’s worth your attention and your capital in 2024.
An Analyst Puts Qualcomm on a ‘Negative Catalyst’ List
Ladies and gentlemen, mark your calendars for May 1. That’s when Qualcomm will report its earnings results for the second quarter of fiscal 2024.
I’m betting on a beat, and here’s why. Qualcomm’s track record of quarterly EPS beats is absolutely stellar. Plus, Wall Street’s expectations aren’t very high this time around.
Analysts are looking for Qualcomm to report $2.32 per share. In the first quarter of fiscal 2024, the company did much better than that, having earned $2.75 per share.
Still, not every expert on Wall Street is highly optimistic. Interestingly, JPMorgan analyst Samik Chatterjee placed Qualcomm stock on his “Negative Catalyst” watch list. Qualcomm
Chatterjee envisions Qualcomm generating $9.5 billion in Q2 FY2024 revenue, which would be higher than the midpoint of Qualcomm’s guidance range and the analysts’ consensus estimate of $9.3 billion.
Chatterjee also is concerned that Qualcomm’s current-quarter revenue guidance will be roughly in line with Wall Street’s call for $9.1 billion.
Qualcomm’s Upcoming Earnings: A More Optimistic View
In contrast, Bernstein analyst Stacy Rasgon believes that Qualcomm “can potentially take center stage with that narrative,” referring to the expected growth of the AI-compatible processor market.
Furthermore, Rasgon sees Qualcomm’s new AI-hardware components as appearing to “compete extremely favorably on multiple AI benchmarks relative to market alternatives.”
All in all, Rasgon views Qualcomm’s AI processors as “holding a leadership position especially in the higher tiers in the market.” With that in mind, Rasgon is clearly not anxious about Qualcomm as the earnings event approaches.
The Bernstein analyst even assigned an ambitious $200 price target to QCOM stock.
I should also mention that Qualcomm recently declared a quarterly dividend of 85 cents per share. So, Qualcomm offers prime processor-market exposure while also offering a passive-income opportunity.
Finally, Qualcomm is reasonably valued. The sector median’s GAAP trailing 12-month price-to-earnings (P/E) ratio is 27.12x, but Qualcomm’s P/E ratio is 23.44x. Just for comparison’s sake, Nvidia’s trailing P/E ratio is 70.44x.
Qualcomm Stock: Buy Before Earnings, Hold for Years
For prospective investors, everything just falls into place perfectly with Qualcomm; you’ll get dividends, good value and an amazing earnings track record.
Sure, you can worry about Qualcomm’s current-quarter revenue guidance being in line with Wall Street’s expectations. Would that really be such a terrible thing, though?
Instead of being a worry wart, I invite you to get ready for a probable earnings beat on May 1. In anticipation of this – and just because Qualcomm is a reasonably valued AI-hardware firm. Feel free to pick up some Qualcomm stock shares today.
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.
