TLDR
- BofA Securities reinstated Qualcomm with an Underperform rating and a $145 price target
- Apple is phasing out Qualcomm modems from iPhones, costing an estimated $7–8 billion in revenue
- Samsung will cut Qualcomm’s Galaxy device content from 100% to ~75% in fall 2026
- Xiaomi has committed $7 billion to developing its own internal chips
- BofA projects just 2% annual revenue growth for Qualcomm through fiscal 2028
Qualcomm stock dropped 3.1% to $133.81 in premarket trading on Tuesday after Bank of America reinstated coverage with an Underperform rating. The stock is now down 19% year-to-date.
BofA set a $145 price target — implying only about 5% upside from Monday’s close. Analyst Vivek Arya cited weak growth prospects and mounting competitive pressure across Qualcomm’s core markets.
The headline risk is Apple. Qualcomm’s modems are expected to be fully phased out of iPhones by fall 2027 as Apple moves to its own in-house chips. BofA estimates the revenue hit at roughly $7–8 billion.
Apple, Samsung, and Xiaomi together made up about 54% of Qualcomm’s revenue in fiscal 2025. That concentration is what makes the current moment so uncomfortable for the company.
Samsung is moving in a similar direction. Qualcomm’s content share in Samsung’s fall 2026 Galaxy lineup will fall from 100% to around 75%, according to BofA. That’s another chunk of business at risk.
Then there’s Xiaomi. The Chinese smartphone maker has committed $7 billion to internal silicon development — a clear signal that it, too, is looking to reduce its reliance on outside chipmakers.
“QCOM’s core equity risk is increasingly defined by their three top customers and their willingness to internalize key silicon over time,” Arya wrote.
Can Diversification Fill the Gap?
Qualcomm has been pushing into automotive and IoT markets to offset the mobile headwinds. BofA projects auto and IoT chipset revenue to grow at roughly 19% per year, reaching about $17.7 billion by fiscal 2028.
Qualcomm is also eyeing AI infrastructure. But even if it captures 10–20% of the ARM-based server CPU market, BofA estimates that translates to just $1–2 billion in revenue and $0.20–$0.40 in incremental earnings per share. That’s not a lot of cushion against a $7–8 billion hole.
CEO Cristiano Amon offered some optimism last month. “While our near-term handsets outlook is impacted by industry-wide memory supply constraints, we are encouraged by end-consumer demand for premium and high tier smartphones,” he said.
Rising memory component prices are adding pressure across the broader smartphone industry. That could weigh on lower-end device sales, though Qualcomm’s premium positioning offers some protection.
BofA’s Growth Outlook
BofA projects Qualcomm’s revenue will grow at just 2% annually through fiscal 2028. For context, the broader semiconductor sector is expected to grow at around 17% over the same period.
The firm said that diversification into higher-growth areas is “largely offset by the potential loss of ~$7bn in Apple modem revenue and competitive share losses at Samsung.”
Qualcomm had a disappointing quarter in early February, offering weaker-than-expected guidance for the current period. That triggered a sharp selloff that has extended through March.
The stock now sits at $133.81 in premarket trading, well below BofA’s $145 price target — which itself is considered a sell-level valuation by the bank.
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