Shares of massive mobile chip designer Qualcomm (QCOM 2.27%) were rallying 4.1% today as of 11:30 a.m. ET. By comparison, the S&P 500 and Nasdaq Composite were up a respective 1.1% and 1.5%.
There was no specific news from the company to cause the rally, but this can likely be chalked up to macroeconomic conditions. Semiconductor stocks in general were hammered in June as evidence began to pile up that the global consumer is tapping the brakes on electronics purchases. Memory chipmaker Micron Technology reported on the last day of June that there's an excess of consumer device inventory, and it could take a couple of quarters to work that excess off.
Given that Qualcomm derives most of its revenue from smartphones, the news hasn't been great. The company could be in for a slowdown in growth this year if the 5G mobile upgrade cycle takes a breather. The stock is down nearly 28% so far in 2022, even after today's jump.
Despite a possible cool-off in 5G and smartphones, Qualcomm is far from the lumbering chip giant it was a few years ago. Under its new management team, the company has rapidly diversified its mobility know-how into new growth opportunities like automotive and the Industrial Internet of Things. It's amassing a new portfolio of artificial-intelligence software to complement its chips and make its hardware easier to implement for engineers. And last week, a report indicated that Apple was having difficulty designing its own mobile modems for the iPhone, signaling that Qualcomm could remain a top Apple supplier for far longer than originally forecast.
Given its growth in multiple markets, some investors have begun to eye Qualcomm stock at this juncture. Shares trade for 21 times trailing-12-month free cash flow and just 10.5 times current-year expected earnings. If the company maintains its pace of expansion, it could be one of the best deals in the semiconductor space right now.