The global inflation problem has intensified, and people are tightening their purse strings, resulting in a significant reduction in demand for consumer electronics products. The financial forecast released by the chip giant Qualcomm disappointed the market, and its stock price fell by more than 30% this year. However, JP Morgan believes that Qualcomm’s stock price will make a comeback next year, and puts forward three reasons to boost the stock price.
“Barron’s” reported that JPMorgan Chase analyst Samik Chatterjee issued a research report on December 14, reiterating his “Overweight” rating on Qualcomm stock, with a target price of $185 per share, which is still 52% away from Qualcomm’s closing price of $121.71 on the 14th. % upside.
The report pointed out that 2022 will be a difficult period for Qualcomm investors. Due to the sluggish momentum of terminal consumption, Qualcomm has revised its forecast for smartphone shipments for the whole year several times, causing the stock price to plummet by 33% so far in 2022. In November of this year, Qualcomm gave a weak financial forecast for the first quarter of the 2023 fiscal year (October-December 2022). Both revenue and profit estimates were lower than market expectations, citing “rapid deterioration in demand for smartphones.”
However, Chatterjee is optimistic that Qualcomm’s stock price is expected to “squat first and then jump”, and there will be more room for performance in 2023, and puts forward three reasons for pushing up Qualcomm’s stock price trend: First, as China unblocks, demand for smartphones will recover, so that the mobile phone market demand stabilized.
Second, the inventory peak of smartphone manufacturers has passed, and the inventory level is expected to gradually return to normal after reaching its peak in the current fourth quarter.
Third, if customers become more optimistic about the follow-up demand, it will drive the strength of client-side purchases and help Qualcomm resume its quarter-by-quarter growth in the second quarter of 2023.
On December 14, Qualcomm’s stock price fell 1.44% to close at $121.71.