Piper Sandler Initiates Qualcomm Coverage With Neutral Rating

Piper Sandler has initiated coverage on Qualcomm (NASDAQ: QCOM) with a Neutral rating and a $190 price target. The firm cites the company's long-term artificial intelligence growth potential while noting the challenges of its late entry into the competitive datacenter market.

The firm acknowledges Qualcomm's progress in securing design wins with hyperscale customers for custom silicon, accelerators, and CPU servers through fiscal year 2029. However, analysts remain cautious about the company's immediate market penetration.

"We would need to see greater industry acceptance of Qualcomm's HBC technology to adopt a more bullish stance on the stock," noted Piper Sandler analysts in their initiation report.

Revenue Diversification Projections

Piper Sandler projects a shift in Qualcomm's business model over the next five years. The firm estimates that datacenter wins will account for approximately 26% of the company's fiscal 2029 revenues. The firm expects the company's reliance on handset revenue to decline, with that segment projected to contribute roughly 50% of earnings before interest and taxes (EBIT) by fiscal 2029.

Divergent Analyst Sentiment

This initiation reflects a spectrum of sentiment among market analysts regarding Qualcomm's transition away from its traditional mobile-centric business model. While Piper Sandler maintains a Neutral outlook, other firms have adopted varying positions:

• StoneX: Continues to maintain a Buy rating, signaling confidence in the company's diversification strategy.
• Cantor Fitzgerald: Recently lowered its price target for the stock, citing concerns regarding competitive pressures in the broader semiconductor market.

What Is at Stake

For Qualcomm, the execution of its datacenter and custom silicon strategy is critical to offsetting the cyclical nature of the smartphone market. The company's ability to gain traction with hyperscale cloud providers remains the primary variable for investors assessing its growth trajectory. The market's reception of its proprietary HBC (High Bandwidth Connectivity) technology will serve as an indicator for future analyst ratings adjustments as the company attempts to carve out space in a sector dominated by established incumbents.