Qualcomm (QCOM) Stock Tumbles 3% as BofA Warns of Stagnant Growth Ahead

Key Takeaways

Table of Contents

Bank of America resumed coverage of Qualcomm with an Underperform rating and $145 price target
Qualcomm faces a $7–8 billion revenue loss as Apple transitions to proprietary modem technology
Samsung plans to reduce Qualcomm content in Galaxy phones from 100% to approximately 75% by fall 2026
Chinese smartphone giant Xiaomi is investing $7 billion in proprietary chip development
Bank of America forecasts only 2% yearly revenue growth for Qualcomm through fiscal year 2028

Shares of Qualcomm declined 3.1% to $133.81 during premarket hours on Tuesday following Bank of America’s resumption of coverage with an Underperform designation. The chipmaker’s stock has now fallen 19% since the beginning of the year.

QUALCOMM Incorporated, QCOM

Bank of America assigned a $145 price objective to the stock — representing approximately 5% potential upside from Monday’s closing price. Analyst Vivek Arya pointed to sluggish expansion prospects and intensifying competition throughout Qualcomm’s primary business segments.

The most significant concern centers on Apple. By fall 2027, Qualcomm’s cellular modems are anticipated to be completely removed from iPhones as Apple transitions to internally developed chips. Bank of America calculates the revenue impact at approximately $7–8 billion.

Apple, Samsung, and Xiaomi collectively accounted for roughly 54% of Qualcomm’s fiscal 2025 revenue. This heavy customer concentration creates substantial vulnerability for the semiconductor company.

Samsung is pursuing a parallel strategy. According to Bank of America, Qualcomm’s presence in Samsung’s fall 2026 Galaxy product line will decline from complete coverage to approximately 75%. This represents another significant revenue stream under threat.

Meanwhile, Xiaomi has allocated $7 billion toward in-house chip development — sending a strong message that the Chinese manufacturer also intends to decrease dependence on external semiconductor suppliers.

“QCOM’s core equity risk is increasingly defined by their three top customers and their willingness to internalize key silicon over time,” Arya wrote.

Will New Markets Compensate for Mobile Losses?

Qualcomm has been aggressively expanding into automotive and Internet of Things segments to counterbalance declining smartphone revenue. Bank of America forecasts automotive and IoT chipset sales will expand at approximately 19% annually, potentially reaching $17.7 billion by fiscal 2028.

The company is also targeting AI infrastructure opportunities. However, even with a 10–20% capture of the ARM-based server processor market, Bank of America calculates this would generate merely $1–2 billion in revenue and contribute $0.20–$0.40 to earnings per share. This contribution barely dents the $7–8 billion revenue gap.

CEO Cristiano Amon expressed measured confidence last month. “While our near-term handsets outlook is impacted by industry-wide memory supply constraints, we are encouraged by end-consumer demand for premium and high tier smartphones,” he said.

Escalating memory component costs are creating headwinds across the smartphone ecosystem. This dynamic could suppress sales of budget-oriented devices, although Qualcomm’s focus on premium markets provides some insulation.

Bank of America’s Revenue Projections

Bank of America anticipates Qualcomm’s revenue will expand at merely 2% per year through fiscal 2028. By comparison, the overall semiconductor industry is projected to achieve approximately 17% growth during the identical timeframe.

The investment bank noted that expansion into faster-growing markets is “largely offset by the potential loss of ~$7bn in Apple modem revenue and competitive share losses at Samsung.”

Qualcomm reported disappointing financial results in early February, issuing below-consensus guidance for the upcoming quarter. This announcement sparked a significant stock decline that has persisted throughout March.

The shares currently trade at $133.81 in premarket activity, notably beneath Bank of America’s $145 price objective — which the bank nonetheless considers a sell recommendation.

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