{"id":66802,"date":"2023-09-29T09:49:53","date_gmt":"2023-09-29T13:49:53","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/will-qualcomm-stock-return-to-pre-inflation-shock-highs-of-over-180\/"},"modified":"2023-09-29T09:49:56","modified_gmt":"2023-09-29T13:49:56","slug":"will-qualcomm-stock-return-to-pre-inflation-shock-highs-of-over-180","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=66802","title":{"rendered":"Will Qualcomm Stock Return To Pre-Inflation Shock Highs Of Over $180?"},"content":{"rendered":"
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Qualcomm stock<\/strong> currently trades at $108 per share, roughly 43% below its pre-inflation shock high of $189, seen in December 2021, and has the potential for meaningful gains. QCOM saw its stock trading at around $128 in late June 2022, just before the Fed started increasing interest rates, and is now 16% below that level, underperforming the broader markets, considering that the S&P 500 rose almost 12% over this period. The decline in Qualcomm
\n QCOM
\n <\/fbs-ticker> stock over the recent past can be attributed to a considerable slowdown in the smartphone and tablet market, amid cooling consumer spending and weaker demand for computing and mobile devices post Covid-19. Over Q3 FY\u201923, the most recent quarter, Qualcomm reported a mixed set of results with revenue missing estimates, declining by 23% year-over-year to $8.44 billion, although profits came in ahead of estimates. There have been some positive developments for the stock as well, with Qualcomm announcing earlier this month it had extended an agreement with Apple
\n AAPL
\n <\/fbs-ticker> to supply modem chips to the iPhone maker until 2026. Apple was expected to use an internally developed 5G modem starting in 2024 but is apparently facing some setbacks with its development.<\/p>\n

Interestingly, QCOM stock has had a Sharpe Ratio of 0.4<\/strong> since early 2017, slightly lower than 0.6<\/strong> for the S&P 500 Index over the same period. This compares with the Sharpe of 1.3<\/strong> for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.<\/p>\n

Returning to the pre-inflation shock level means that Qualcomm stock will have to gain 76% from here. However, we do not believe that will materialize anytime soon and estimate Qualcomm valuation<\/strong> to be around $133 per share, implying about 22% gains. This is because of an expected decline in earnings and revenue in the near term due to a weak smartphone market and lower modem demand. Moreover, the recent uncertainty in the financial sector has raised concerns about a potential recession, which may impact Qualcomm\u2019s business.<\/p>\n

Our detailed analysis of Qualcomm upside post-inflation shock<\/strong> captures trends in the company\u2019s stock during the turbulent market conditions seen over 2022. It compares these trends to the stock\u2019s performance during the 2008 recession.<\/p>\n

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2022 Inflation Shock<\/strong><\/p>\n

Timeline of Inflation Shock So Far:<\/p>\n