Qualcomm emerges as a top AI stock with strong growth potential, presenting an appealing investment opportunity.

From Nasdaq: 2024-09-22 05:25:00

Nvidia has seen triple-digit revenue and earnings growth, with its stock soaring 1,000% from its 2022 low due to its dominance in AI chip development. However, investors are now turning their attention to Qualcomm (NASDAQ: QCOM) as Nvidia’s high valuation and rising competition raise concerns about future growth potential.

Qualcomm, a key player in AI chip technology for smartphones, has introduced the AI-capable Snapdragon 8 Gen 3 chip, enabling Apple to launch its first AI-ready iPhone. With an estimated 38% CAGR in the AI chip market through 2032, Qualcomm’s focus on innovation and expansion into the automotive and IoT sectors positions it for growth.

Qualcomm’s revenue in fiscal 2022 grew 39% before a 19% dip the following year, but signs of another upgrade cycle are emerging. With $29 billion in revenue reported for the first nine months of fiscal 2024, Qualcomm’s net income rose by 26% annually and its stock is up nearly 55% over the past year, presenting an appealing investment opportunity.

Despite Nvidia’s current lead in AI, Qualcomm’s innovation in smartphone chipsets and other sectors like automotive sets it up for a new growth cycle. With a low P/E ratio of 22 and the potential for increased revenue growth, Qualcomm’s stock could be a strong contender for investors seeking exposure to AI-enabled technology.

Consider investing in Qualcomm now as it enters a new upgrade cycle fueled by AI innovation. The Motley Fool has identified Qualcomm as a promising stock, highlighting its potential for substantial returns in the coming years. Past recommendations like Nvidia in 2005 have delivered impressive results, making Qualcomm an attractive investment opportunity in the AI sector.



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