Key Takeaways
- Bank of America resumed coverage of Qualcomm with an Underperform rating and $145 price target
- The chipmaker faces a $7–8 billion revenue loss as Apple transitions to proprietary modems
- Qualcomm’s presence in Samsung Galaxy phones will shrink from 100% to approximately 75% by fall 2026
- Xiaomi’s $7 billion investment in chip development signals another major customer moving away
- Annual revenue growth is forecast at only 2% through fiscal year 2028, per BofA
Shares of Qualcomm slid 3.1% to $133.81 during Tuesday’s premarket session following Bank of America’s decision to resume coverage with an Underperform designation. The semiconductor giant has now shed 19% of its value since the start of the year.
Bank of America established a $145 price objective, suggesting modest 5% upside from the prior session’s closing price. Lead analyst Vivek Arya highlighted deteriorating growth trajectories and intensifying competitive threats throughout Qualcomm’s primary business segments.
The most significant concern centers on Apple. By autumn 2027, Qualcomm’s modem chips are projected to be entirely removed from iPhone devices as Apple completes its transition to proprietary silicon. Bank of America calculates this shift will eliminate approximately $7–8 billion in annual revenue.
Apple, Samsung, and Xiaomi collectively accounted for roughly 54% of Qualcomm’s fiscal 2025 revenue. This heavy customer concentration is creating substantial vulnerability for the chipmaker during this transitional period.
Samsung is implementing similar changes. The South Korean electronics giant will reduce Qualcomm’s chip presence in its fall 2026 Galaxy smartphone series from complete dominance to approximately 75%, based on BofA’s analysis. This represents yet another significant revenue stream under threat.
Meanwhile, Xiaomi has announced a $7 billion commitment toward developing proprietary semiconductors—a definitive indication that this major Chinese smartphone manufacturer also intends to diminish its dependence on external chip suppliers.
“QCOM’s core equity risk is increasingly defined by their three top customers and their willingness to internalize key silicon over time,” Arya wrote.
Will New Markets Compensate for Mobile Losses?
Qualcomm has been aggressively expanding into automotive and Internet of Things sectors to counterbalance declining mobile prospects. Bank of America forecasts these chipset categories will expand approximately 19% annually, potentially generating around $17.7 billion by fiscal 2028.
The company is also positioning itself in artificial intelligence infrastructure. However, even assuming Qualcomm captures 10–20% of the ARM-based server processor market, BofA estimates this would only contribute $1–2 billion in revenue and $0.20–$0.40 in additional earnings per share. Such gains barely offset the massive gap created by losing Apple’s business.
CEO Cristiano Amon offered some optimism last month. “While our near-term handsets outlook is impacted by industry-wide memory supply constraints, we are encouraged by end-consumer demand for premium and high tier smartphones,” he said.
Escalating memory component costs are creating additional challenges across the smartphone ecosystem. This trend could suppress sales in lower-tier device categories, though Qualcomm’s emphasis on premium markets provides some insulation.
Revenue Growth Projections Paint Concerning Picture
Bank of America anticipates Qualcomm’s revenue will expand at merely 2% per year through fiscal 2028. By comparison, the overall semiconductor industry is projected to achieve approximately 17% growth during the identical timeframe.
The investment bank noted that expansion into faster-growing market segments is “largely offset by the potential loss of ~$7bn in Apple modem revenue and competitive share losses at Samsung.”
Qualcomm delivered disappointing results in early February, providing below-consensus guidance for the upcoming quarter. That announcement sparked a significant selloff that has persisted throughout March.
Premarket trading shows the stock at $133.81, trading below even BofA’s $145 price target—which the bank itself associates with an Underperform recommendation.
