Bank of America is betting on Qualcomm’s momentum by raising its price target from $200 to $215 and maintaining its buy rating.
The analyst stated that Qualcomm posted a “solid quarter with revenue increasing 10% versus the Street’s 5.1%, driven by QCT growth of 13.2% versus the Street’s 7.7%.”
The analyst note said that:
QCT’s growth came from all segments: Phones, Auto and IoT increased 14.2%, 17.1% and 7.4%, respectively.
Bank of America said Qualcomm’s “intermediate term appears somewhat challenged by unsustainable trends in phones, and we expect strength to decelerate in 2Q26.”
That mix of power and prudence perfectly describes the company’s current situation. Strong growth in the automotive and IoT markets shows Qualcomm is expanding beyond smartphones, but the bank maintains that the company’s QCT revenue still comes from mobile phones, which may have peaked in the cycle.
The message to investors is clear: Qualcomm’s AI-powered diversification is genuine, but the phone surge that helped it beat expectations may not last. Bank of America’s $215 price target means there’s still room for growth, as long as the chipmaker can continue moving into automobiles, IoT and new data center prospects.
Qualcomm’s chip business continues to evolve as demand for AI accelerates.Clinton/Sportsfile for Web Summit via Getty Images
Bank of America’s positive decision was based on a clean result in almost all operating lines. Qualcomm’s QCT division, which spans mobile phones, automobiles and the Internet of Things, performed better than expected across the board.
Here’s how the quarter stacked up:
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Total income:+10% year over year vs. +5.1% Street
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QCT segment: +13.2% compared to +7.7% on the street
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Headphones: +14.2%
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Automotive: +17.1% in demand for digital chassis
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IoT: +7.4% in adoption of connected devices
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Operating margin: 33.8%, about 20 basis points below Street expectations
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Earnings per share: 12 cents above consensus
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Rating change: Model carried over to FY27E, multiple increased to 17x from 15x FY26E
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The results were “strong QCT results across all segments,” the analysts said, indicating that strength was evenly distributed across all of its product lines, rather than concentrated in just one.
BofA’s new model now expects Auto and IoT to contribute more in the long term, helping to offset what it sees as a temporary rise in smartphone sales.
Bank of America’s positive outlook for Qualcomm comes with a clear asterisk: The growth in mobile phone sales is cyclical, not structural.
Smartphone demand in China was the main driver of the quarter, thanks to holiday launches of Android phones and a trend towards higher-end models. That mix change helped QCT expand by double digits, but it likely won’t happen again when seasonal influences fade in early 2026.