Qualcomm (NASDAQ:QCOM) Shares Gap Up – Should You Buy?

Shares of Qualcomm Incorporated (NASDAQ:QCOM) gapped up prior to trading on Tuesday . The stock had previously closed at $168.74, but opened at $180.40. Qualcomm shares last traded at $176.3270, with a volume of 8,064,463 shares changing hands.

More Qualcomm News

Here are the key news stories impacting Qualcomm this week:

• Positive Sentiment: Amazon deal creates a long-term growth catalyst: Qualcomm will develop multiple generations of custom AI data-center chips and optical networking products for Amazon Web Services. The agreement could generate as much as $60 billion in purchases through 2036, giving Qualcomm a marquee hyperscale customer and validating its data-center strategy. Qualcomm’s Data Center Bet Looks More Real After Amazon’s AI Deal
• Positive Sentiment: Amazon has a financial stake in execution: Amazon received warrants to purchase up to 25 million QCOM shares at $161.26 each. Most warrants vest as AWS reaches purchasing milestones, linking Amazon’s potential ownership to actual demand for Qualcomm’s products.
• Positive Sentiment: Expansion goes beyond processors: Qualcomm will supply optical connectivity technology capable of supporting high-bandwidth data-center interconnects. The combination of custom inference silicon and networking products could increase Qualcomm’s role in Amazon’s AI infrastructure and support its target of $15 billion in annual data-center revenue by fiscal 2029. Qualcomm Announces Multi-Generational Product Collaboration with Amazon
• Positive Sentiment: Analyst support reinforces the move: Rosenblatt Securities reaffirmed its buy rating and set a $235 price target. Commentators said the Amazon relationship gives the previously range-bound stock a clearer growth narrative, while some investors believe QCOM’s valuation remains below that of other custom data-center chip suppliers.
• Neutral Sentiment: Revenue benefits are several quarters away: Qualcomm says the jointly developed processors are already in production, with initial revenue expected in fiscal first-quarter 2027. Investors will likely focus on shipment timing, AWS adoption and subsequent purchasing milestones.
• Negative Sentiment: Execution and dilution remain risks: The $60 billion purchasing potential spans a decade and is not guaranteed. Full vesting of the warrants could dilute existing shareholders by roughly 2.2%. Qualcomm also recently reported declining year-over-year revenue and a drop in handset processor sales, leaving the company exposed if data-center growth takes longer than expected.

Wall Street Analyst Weigh In

Several equities research analysts recently weighed in on QCOM shares. TD Cowen decreased their price target on Qualcomm from $225.00 to $175.00 and set a “buy” rating for the company in a report on Thursday, July 30th. UBS Group dropped their target price on Qualcomm from $190.00 to $170.00 and set a “neutral” rating on the stock in a research report on Thursday, July 30th. Citigroup cut their target price on Qualcomm from $198.00 to $175.00 and set a “neutral” rating for the company in a research note on Wednesday, July 29th. DZ Bank raised Qualcomm from a “hold” rating to a “buy” rating and set a $265.00 price target for the company in a report on Friday, June 26th. Finally, Weiss Ratings reaffirmed a “hold (c)” rating on shares of Qualcomm in a report on Wednesday, June 24th. Two equities research analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating, twenty-two have assigned a Hold rating and two have issued a Sell rating to the company’s stock. According to MarketBeat.com, the company currently has a consensus rating of “Hold” and an average target price of $204.10.

Qualcomm Price Performance

The company has a 50 day moving average of $168.32 and a 200 day moving average of $170.51. The stock has a market capitalization of $185.26 billion, a price-to-earnings ratio of 20.42, a price-to-earnings-growth ratio of 3.63 and a beta of 1.68. The company has a quick ratio of 1.28, a current ratio of 2.02 and a debt-to-equity ratio of 0.46.

Qualcomm (NASDAQ:QCOM) last released its earnings results on Wednesday, July 29th. The wireless technology company reported $2.21 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $2.23 by ($0.02). Qualcomm had a net margin of 21.01% and a return on equity of 38.36%. The company had revenue of $9.95 billion during the quarter, compared to analysts’ expectations of $9.69 billion. During the same quarter in the previous year, the firm posted $2.77 earnings per share. Qualcomm’s revenue for the quarter was down 4.0% compared to the same quarter last year. Qualcomm has set its Q4 2026 guidance at 2.050-2.250 EPS. As a group, equities research analysts forecast that Qualcomm Incorporated will post 7.74 EPS for the current fiscal year.

Qualcomm Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, September 24th. Shareholders of record on Thursday, September 3rd will be paid a dividend of $0.92 per share. This represents a $3.68 dividend on an annualized basis and a dividend yield of 2.1%. The ex-dividend date is Thursday, September 3rd. Qualcomm’s payout ratio is currently 42.59%.

Insider Transactions at Qualcomm

In other news, CAO Patricia Grech sold 208 shares of the stock in a transaction dated Monday, August 31st. The stock was sold at an average price of $170.00, for a total value of $35,360.00. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Heather Ace sold 3,200 shares of the business’s stock in a transaction on Monday, August 3rd. The stock was sold at an average price of $147.04, for a total transaction of $470,528.00. Following the transaction, the executive vice president directly owned 36,535 shares in the company, valued at approximately $5,372,106.40. The trade was a 8.05% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 9,033 shares of company stock valued at $1,467,844 over the last quarter. Company insiders own 0.05% of the company’s stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently bought and sold shares of the business. Baxter Bros Inc. acquired a new stake in Qualcomm during the 2nd quarter worth approximately $17,844,000. MUFG Securities EMEA plc boosted its holdings in shares of Qualcomm by 112.2% in the fourth quarter. MUFG Securities EMEA plc now owns 43,986 shares of the wireless technology company’s stock valued at $7,524,000 after buying an additional 23,262 shares during the period. Western Wealth Management LLC increased its position in shares of Qualcomm by 16.9% during the fourth quarter. Western Wealth Management LLC now owns 20,682 shares of the wireless technology company’s stock worth $3,538,000 after acquiring an additional 2,990 shares in the last quarter. Requisite Capital Management LLC bought a new stake in shares of Qualcomm during the fourth quarter worth $700,000. Finally, Financial Synergies Wealth Advisors Inc. acquired a new stake in shares of Qualcomm in the 4th quarter valued at about $499,000. Hedge funds and other institutional investors own 74.35% of the company’s stock.

About Qualcomm

Qualcomm Incorporated (NASDAQ: QCOM) is a technology company that develops wireless communications technologies, semiconductors and related intellectual property. Headquartered in San Diego, California, the company serves customers and partners worldwide across the mobile, automotive, consumer electronics and industrial markets.

Through its Qualcomm CDMA Technologies (QCT) business, Qualcomm designs and supplies integrated circuits, system software and hardware platforms. Its products include Snapdragon mobile platforms, 5G and other wireless modems, radio-frequency components, connectivity solutions, processors and artificial intelligence technologies.