This week, we're highlighting Qualcomm (QCOM), a leading global semiconductor and telecommunications company.

We’ll explore the latest trends and take a close look at the company's recent market activity.

Could Qualcomm shake up Intel and AMD's PC market dominance?

Qualcomm has long been known for its mobile phone chips, while the PC chip market has been primarily dominated by Intel and AMD. However, with the advancement of AI technology, this market landscape may change.

On May 20th, Microsoft launched the latest Surface Laptop and Surface Pro tablets, featuring Qualcomm's Snapdragon X Elite and X Plus chips.

Other computer makers like Lenovo, Dell, HP, Asus, Acer, and Samsung are also set to release AI PCs using Qualcomm chips.

This signals a shift in PC chip architecture from x86 to ARM architectures, as Qualcomm's Snapdragon X Elite is ARM-based. This shift gives Qualcomm a chance to enter and capture a share of the PC chip market.

How big is this market?

Bank of America analysts estimate the target market for these devices is approximately 60 million consumer laptops that retail for over $1,000, with expectations for market expansion in 2025.

While Intel and AMD might introduce more powerful AI chips in the future, Qualcomm currently holds an early lead in the AI computer market. If Qualcomm can continue to penetrate the PC chip market, this segment could become a major driver of the company's future growth.

How much revenue can AI PCs bring to Qualcomm?

Investors are curious about the potential revenue contributions of AI PCs to Qualcomm. Currently, Qualcomm's primary business segments are QCT (chip business) and QTL (technology licensing business).

In Q2 of fiscal year 2024, Qualcomm reported a total revenue of $9.39 billion, with the QCT chip business accounting for a significant 85.48%.

According to the Q2 FY2024 earnings call, management indicated that the PC business would start contributing in fiscal year 2025, with more details to be provided in the next quarter. For now, the Q3 financial guidance does not include substantial contributions from the PC business.

However, analysts have provided some forecasts for reference. Bank of America analysts predict that Qualcomm could capture 70% of the AI-equipped PC market share.

In terms of revenue, they estimate that by 2025, the AI PC business could contribute an additional $286 million to $861 million to Qualcomm's revenue. Regarding earnings per share (EPS), they project that by 2025, the AI PC business could add an extra $0.06 to $0.19 per share, with further increases to $0.13 to $0.27 per share by 2026.

For context, in fiscal year 2023, Qualcomm's total revenue was $35.82 billion, with an EPS of $6.42.

Chart of the day

Fueled by the hype around AI PCs, Qualcomm's stock price surged to a record high of $204.37 in May.

Looking at the daily chart, Qualcomm's stock price began an upward trend in November 2023, with gains reaching 42.61% since 2024, significantly outperforming the S&P 500 and NASDAQ indices.

Images provided are not current and any securities are shown for illustrative purposes only and is not a recommendation.

Technical indicators：

• Trend Analysis: Investors can analyze trends using moomoo's Parallel Channel, which shows that Qualcomm's stock price is generally in an upward trend and has recently attempted to break above the upper channel boundary. Typically, a breakout from the channel could indicate the potential for further development in the direction of the breakout. However, investors need to be cautious about distinguishing between a true breakout and a false breakout.

• Strength of Trend: The MACD indicator can gauge the strength of the trend. A bearish crossover and a negative histogram may suggest a weakening upward momentum.

Next move?

AI PCs have been one of the hottest investment themes in 2024. The primary rationale is that the gradual introduction of AI PC products may trigger a wave of PC upgrades.

Qualcomm's stock price has been soaring in 2024, partly due to its involvement in AI PCs.

In the short term, although Qualcomm's stock price recently broke above the channel line, the MACD is signaling a short-term peak. If the stock price pulls back, investors can watch for potential support along the midline and lower boundary of the channel.

In the long term, investors need to monitor the progress of Qualcomm's PC business. Management has indicated that more information will be disclosed in the next quarter.

Additional Disclosures: This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, opinions or forecasts provided herein will prove to be correct.

This presentation discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve.