Qualcomm stock (NASDAQ:QCOM) has shown moderate performance this year, increasing by about 3% year-to-date amid uncertainties regarding U.S.-China trade and tariffs on semiconductor imports. Nevertheless, Qualcomm’s operations have remained robust until the last quarter. In Q2 FY’25 (March 2025), the company reported results that exceeded expectations, with revenue climbing 15% year-over-year to $10.84 billion, while earnings per share reached $2.85 as the smartphone market rebounded following a post-Covid-19 slump. Qualcomm aims to diversify its revenue sources beyond mobile chipsets, pursuing an equal revenue distribution between handsets and non-handsets by the end of this decade. The automotive industry will be a significant area of focus for the company, with semiconductor content in vehicles aimed at generating $8 billion in revenue by fiscal year 2029. Additionally, Qualcomm is entering the data center sector through the acquisition of Alpha Wave.
Overall, taking into account the company’s relatively strong performance and future prospects, we consider the stock to be appealing, making it a smart choice to purchase at its current price of approximately $160. We believe there is little reason for concern regarding QCOM stock, which makes it attractive in light of its current moderate valuation. Our conclusion is based on comparing the present valuation of QCOM stock with its operational performance in recent years along with its current and historical financial state. Our assessment of Qualcomm across key metrics, including Growth, Profitability, Financial Stability, and Downturn Resilience, indicates that the company boasts a very strong operational performance and financial standing, as outlined below. However, for investors looking for less volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative, having surpassed the S&P 500 and generated returns exceeding 91% since its inception.
How Does Qualcomm’s Valuation Compare to The S&P 500?
Based on the price you pay per dollar of sales or profit, QCOM stock appears somewhat undervalued relative to the broader market.
• Qualcomm has a price-to-sales (P/S) ratio of 4.2 in comparison to a figure of 3.0 for the S&P 500
• Furthermore, the company’s price-to-free cash flow (P/FCF) ratio stands at 12.4 opposed to 20.5 for the S&P 500
• Additionally, it has a price-to-earnings (P/E) ratio of 16.2 versus the benchmark’s 26.4
How Have Qualcomm’s Revenues Expanded Over Recent Years?
Qualcomm’s Revenues have experienced significant growth in recent years.
• Qualcomm has seen its revenue grow at an average rate of 5.3% over the past 3 years (versus a growth of 5.5% for the S&P 500)
• Its revenues have increased by 12.1% from $36 billion to $42 billion in the last 12 months (compared to a growth of 5.5% for the S&P 500)
• Moreover, its quarterly revenues increased by 17.5% to $11 billion in the latest quarter from $9.4 billion a year prior (compared to a 4.8% improvement for the S&P 500)
What Is Qualcomm’s Profitability Like?
Qualcomm’s profit margins are significantly higher than most companies within the Trefis coverage universe.
• Qualcomm’s Operating Income for the last four quarters was $11 billion, representing a high Operating Margin of 26.4% (compared to 13.2% for the S&P 500)
• Qualcomm’s Operating Cash Flow (OCF) during this period was $14 billion, indicating a high OCF Margin of 34.0% (in contrast to 14.9% for the S&P 500)
• Over the last four-quarter period, Qualcomm’s Net Income was $11 billion – reflecting a considerably high Net Income Margin of 25.9% (compared to 11.6% for the S&P 500)
Is Qualcomm Financially Stable?
Qualcomm’s balance sheet appears very strong.
• Qualcomm’s Debt stood at $15 billion at the end of the most recent quarter, while its market capitalization is $176 billion (as of 6/11/2025). This results in a strong Debt-to-Equity Ratio of 8.5% (in contrast to 19.9% for the S&P 500). [Note: A lower Debt-to-Equity Ratio is preferable]
• Cash (alongside cash equivalents) constitutes $14 billion of the $55 billion in Total Assets for Qualcomm. This results in a very strong Cash-to-Assets Ratio of 25.7% (versus 13.8% for the S&P 500)
How Resilient Is QCOM Stock During Economic Downturns?
QCOM stock has demonstrated an impact that was slightly better than the benchmark S&P 500 index during several recent downturns. Concerned about the effects of a market crash on QCOM stock? Our dashboard How Low Can Qualcomm Stock Go In A Market Crash? offers a comprehensive analysis of the stock’s performance during and after prior market crashes.
Inflation Shock (2022)
• QCOM stock decreased 45.1% from a peak of $189.28 on December 15, 2021, to $103.88 on November 3, 2022, compared to a peak-to-trough decline of 25.4% for the S&P 500
• The stock completely recovered to its pre-Crisis peak by May 15, 2024
• Since then, the stock has risen to a high of $227.09 on June 19, 2024, and is currently trading at around $160
Covid Pandemic (2020)
• QCOM stock fell 36.5% from a high of $95.91 on January 17, 2020, to $60.91 on March 20, 2020, compared to a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by July 30, 2020
Global Financial Crisis (2008)
• QCOM stock dropped 48.2% from a high of $56.37 on August 15, 2008, to $29.21 on November 20, 2008, compared to a peak-to-trough decline of 56.8% for the S&P 500
• The stock completely recovered to its pre-Crisis peak by February 10, 2011
Putting Everything Together: Implications for QCOM Stock
In conclusion, Qualcomm’s performance across the parameters detailed above is summarized as follows:
• Growth: Very Strong
• Profitability: Very Strong
• Financial Stability: Extremely Strong
• Downturn Resilience: Neutral
• Overall: Very Strong
This is not adequately reflected in the stock’s moderate valuation, which is why we believe it is appealing, supporting our conclusion that QCOM is a wise stock to acquire.
While QCOM stock appears promising, investing in a single stock can carry risks. Conversely, the Trefis High Quality (HQ) Portfolio, comprising 30 stocks, has a history of consistently outperforming the S&P 500over the past four years. What is the reason? As a collective, HQ Portfolio stocks have yielded better returns with lower risk compared to the benchmark index; resulting in less volatility, as illustrated in HQ Portfolio performance metrics.