Semiconductor stocks have taken a beating in the market this past year, which is evident from the 28% decline in the PHLX Semiconductor Sector index. Investors have lost confidence in this sector amid poor sales in key verticals such as personal computers and smartphones.

Qualcomm (QCOM 1.41%) is among those that have borne the brunt of the sell-off in semiconductor stocks. Shares of the chipmaker are down 36% in the past year, which isn't surprising as the smartphone market's weakness weighs on its financial performance.

So it wouldn't be surprising to see the chipmaker's shares remain under pressure in 2023. However, the company has set its sights on a massive opportunity that could supercharge its long-term growth.

Qualcomm's automotive business is set up for rapid growth

Qualcomm issued tepid guidance for the first quarter of fiscal 2023, calling for $9.6 billion in revenue at the midpoint of its range. That would translate into a 10% year-over-year drop in the company's top line. Analysts are anticipating an 8.6% decline in Qualcomm's revenue for the full fiscal year to $40.4 billion.

Yet, its automotive business has been growing at a nice pace thanks to the increasing adoption of chips in cars for powering multiple applications, including autonomous driving, virtual cockpits, and in-car entertainment, among others. Moreover, electric vehicles reportedly carry much higher semiconductor content, which could be three times what's inside internal combustion engine vehicles.

Not surprisingly, Qualcomm's automotive revenue increased an impressive 41% in fiscal 2022 to $1.37 billion. While that was just over 3% of Qualcomm's annual revenue, this segment could move the needle in a big way for the company in the future. That's because Qualcomm has already built a $30 billion design win pipeline in the automotive business, as the company pointed out on its automotive investor day in September last year.

A design win means that Qualcomm's chips have been selected for use by automakers and OEMs (original equipment manufacturers) in their offerings, and these wins should start translating into revenue once those products go into production. Qualcomm expects its automotive design win pipeline to grow substantially over the next couple of years. That wouldn't be surprising, as its pipeline more than doubled in a matter of just 10 months. Qualcomm was sitting on a $13 billion pipeline in November 2021.

It is also worth noting that Qualcomm sees a $100 billion addressable market in the automotive business by 2030, driven by the deployment of advanced driver assistance systems (ADAS), connectivity, and digital cockpit. Thanks to these tailwinds and the sizable design win pipeline, Qualcomm sees its automotive revenue increasing at a compound annual growth rate of 32% through fiscal 2026.

But don't be surprised to see Qualcomm clock faster growth in this segment. It could land more customers given its focus on pushing the envelope in this space with new products.

Qualcomm recently introduced the Snapdragon Ride Flex system-on-chip (SoC) family, which will allow automakers and OEMs to equip vehicles with ADAS, digital cockpit, and autonomous driving capabilities using the same hardware. The chipmaker says that the scalable nature of this platform means that it can be used by automakers looking to deploy both entry-level and advanced systems.

Putting these functions on a single platform will allow automakers to reduce costs and accelerate deployments. Qualcomm plans to start manufacturing these chips next year, so it wouldn't be surprising to see the company's revenue pipeline improve further once this platform hits the market.

Investors are getting a good deal right now

Qualcomm stock's steep decline in the past year has made the shares cheap,  trading at just 10 times trailing earnings. That's a significant discount to its five-year average earnings multiple of 25. Of course, the company's tepid near-term prospects on account of the weakness in smartphones mean that the stock is likely to remain under pressure. After all, handsets produced nearly 57% of the company's revenue in the previous fiscal year.

But investors may want to take advantage of this tech stock's cheap valuation and accumulate it, especially considering that smartphone sales are expected to bounce back in 2024, according to Strategy Analytics. Throw in the automotive market's acceleration, and it wouldn't be surprising to see a turnaround in Qualcomm's fortunes next year.