Qualcomm (QCOM 0.93%), one of the world's leading mobile chipmakers, turned a $1,000 investment into about $2,500 over the past decade. However, the same investment in a simple S&P 500 index fund would have grown to nearly $3,200 during the same period.
Qualcomm couldn't outperform the S&P 500 because it was too dependent on the smartphone market, faced significant competition from MediaTek, and largely missed the secular shift toward data center AI chips. It's also heavily exposed to trade conflicts between the U.S. and China, while its sales of automotive, Internet of Things (IoT), edge networking, and PC chips simply aren't growing quickly enough to offset its slowing smartphone chip sales.
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It's still generating stable earnings growth and pays a reliable dividend, but it's struggling to command a higher valuation like Nvidia (NVDA +0.10%), Broadcom (AVGO 0.12%), and other higher-growth AI chipmakers. So could Qualcomm get its act together and turn a fresh $1,000 investment into more than $10,000 by the end of this decade?
How fast is Qualcomm growing?
From fiscal 2025 (which ended last September) to fiscal 2028, analysts expect Qualcomm's revenue to grow at a 2% CAGR. Its sales growth will remain tepid as it struggles to sell more mobile chips in the saturated smartphone market.
NASDAQ: QCOM
Key Data Points
To make matters worse, the AI boom is reducing the supply of memory chips available for smartphone makers. If fewer smartphones are built and sold, Qualcomm's sales of Snapdragon system-on-chips (SoCs) -- which combine a CPU, GPU, and connectivity -- will drop off a cliff. Qualcomm still generates over half of its revenue from the smartphone market, but IDC expects global smartphone shipments to drop nearly 13% this year.
Qualcomm also expects its largest customer, Apple (AAPL +1.15%), to fully replace its 5G modems with its own in-house modems by the end of 2027. That loss could reduce Qualcomm's annual revenue by up to $8 billion (18% of its projected revenue for fiscal 2026).
Analysts expect Qualcomm's EPS to grow at a healthier 28% CAGR from fiscal 2025 to fiscal 2028 -- but that's mainly due to easy comparisons to its 44% decline in fiscal 2025, as well as a fresh $20 billion buyback plan that it greenlit earlier this year.
Could Qualcomm deliver a tenbagger gain by 2030?
If Qualcomm matches analysts' estimates through fiscal 2028, grows its EPS at a steady 10% CAGR through fiscal 2030 as it resolves its long-term challenges, and still trades at 15 times its current year's earnings by the final year, its stock could rise 46% to nearly $190 by the end of this decade. That would be a decent four-year gain -- which could beat the S&P 500's average annual return of about 10% -- but it certainly wouldn't turn a $1,000 investment into $10,000.
