Qualcomm: The Market Is Missing The Optionality

Rafa F. Oliver, CFA1.3K FollowersFollow5ShareSavePlay(14min)CommentsSummaryQualcomm is undervalued at $131.28, trading at a 9.3% FCF yield, with a DCF-derived intrinsic value of $137.40.QCOM's Snapdragon platform and diversification into automotive, IoT, and data centers offer significant growth optionality beyond handset modems.Apple's modem exit and MediaTek competition pose risks, but QTL royalties and a $45B automotive design-win pipeline provide downside protection.I recommend buying QCOM, as the risk/reward profile is asymmetrically positive despite near-term headwinds and only a modest valuation premium. AutumnSkyPhotography/iStock Editorial via Getty Images Investment Thesis Qualcomm (QCOM) is one of the clearest opportunities in the market right now. The market is missing two of the clearest pieces of evidence of a hidden opportunity: 1) a $45B design-win pipeline in theThis article was written byRafa F. Oliver, CFA1.3K FollowersFollowInvesting in high-growth opportunities across industries, employing a value investing approach that prioritizes robust business models and strategic foresight. Focusing on companies with the potential to profoundly influence the global landscape in the years aheadI primarily employ the discounted cash flow (DCF) valuation methodology, although I remain adaptable to various valuation techniques. Additionally, I leverage business model frameworks derived from institutions like Harvard Business School and other renowned universities for in-depth analysis. This approach ensures a comprehensive understanding of a company's intrinsic value and strategic positioning within its industry landscape, facilitating informed investment decisions with a focus on long-term growth potential and risk mitigation.Educational background: MBA IESE Business School, University of Navarra and chartered financial analyst with CFA InstituteAnalyst’s Disclosure: I/we have a beneficial long position in the shares of QCOM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.