BofA cuts Qualcomm target on near-term smartphone chip sales risks
Investing.com -- Bank of America cut its price target on Qualcomm Inc (NASDAQ:QCOM) to $200 from $245, citing a more cautious outlook for smartphone chip sales, but maintained a Buy rating on the stock, supported by long-term diversification efforts and what it views as a compelling valuation.
The brokerage said the handset market, which accounts for nearly three-quarters of Qualcomm's chip revenue, has peaked and faces limited near-term catalysts. Weaker demand from China, moderating gains at Samsung (KS:005930), and Apple's planned switch to in-house modems for more iPhones are all likely to weigh on growth, it said.
While Qualcomm's Internet of Things and automotive segments grew 27% and 59% year-over-year in the most recent quarter, BofA noted that some of that momentum may reflect easy comparisons. It expects smartphone-related revenue to decline sequentially in the coming quarters.
Still, the note pointed to longer-term opportunities in AI PCs, connected vehicles and data center infrastructure. Qualcomm's recent acquisition of Alphawave gives it a foothold in high-speed interconnects critical to artificial intelligence workloads.
BofA projects that automotive, IoT, and other non-smartphone categories could contribute 40% of Qualcomm's chip business by 2030, up from 27% currently. However, it cautioned that management's growth targets, particularly in IoT, may be overly optimistic.
The brokerage lowered its earnings and revenue forecasts and now values Qualcomm at 15 times projected 2026 earnings, down from 17 times previously. The shares currently trade at about 12 times forward earnings, below the stock's historical average of 15–18 times, which BofA said could offer long-term investors an entry point.
Though BofA said Qualcomm's strategic pivot toward faster-growing markets supports its long-term investment case.
Related articles
BofA cuts Qualcomm target on near-term smartphone chip sales risks
Roku upgraded as ad tie-up with Amazon to boost its 2026 earnings
Piper Sandler starts at SAP at Buy, highlights 'multiple tailwinds beyond 2030'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Associated Press
an hour ago
- Associated Press
Forte Biosciences Announces Pricing of $75 Million Public Offering
DALLAS--(BUSINESS WIRE)--Jun 25, 2025-- Forte Biosciences, Inc. (Nasdaq: FBRX), a clinical-stage biopharmaceutical company focused on autoimmune and autoimmune-related diseases, today announced the pricing of a public offering of 5,630,450 shares of its common stock at a price to the public of $12.00 per share and, in lieu of common stock to certain investors who so chose, pre-funded warrants to purchase up to 619,606 shares of common stock at a price to the public of $11.999 per pre-funded warrant, which represents the per share public offering price of each share of common stock less the $0.001 per share exercise price for each pre-funded warrant. In addition, Forte has granted the underwriters a 30-day option to purchase up to an additional 937,508 shares of its common stock at the public offering price, less the underwriting discounts and commissions. All of the shares of common stock and pre-funded warrants are being offered by Forte. The gross proceeds from the offering are expected to be approximately $75 million before deducting underwriting discounts and commissions and other offering expenses. The offering is expected to close on or about June 26, 2025, subject to satisfaction of customary closing conditions. Forte intends to use the net proceeds of the offering for working capital and other general corporate purposes, which includes funding clinical and preclinical development of its product candidate and other research activities. TD Cowen, Evercore ISI, Guggenheim Securities and Chardan are acting as joint book-running managers for the offering. Lucid Capital Markets and Brookline Capital Markets, a division of Arcadia Securities, LLC are acting as co-managers for the offering. The offering is being made pursuant to a Registration Statement on Form S-3 (File No. 333-286226), including a base prospectus, previously filed with and declared effective by the SEC. A preliminary prospectus supplement and accompanying prospectus relating to and describing the terms of the offering has been filed with the SEC. A final prospectus supplement and accompanying prospectus relating to the offering will also be filed with the SEC. These documents can be accessed for free through the SEC's website at Copies of the final prospectus supplement and accompanying prospectus relating to the offering, when available, may also be obtained from TD Securities (USA) LLC, 1 Vanderbilt Avenue, New York, NY 10017, by telephone at (855) 495-9846 or by email at [email protected], Evercore Group L.L.C., Attention: Equity Capital Markets, 55 East 52nd Street, 35th Floor, New York, NY 10055, by telephone at (888)-474-0200, or by email at [email protected], Guggenheim Securities, LLC, Attention: Equity Syndicate Department, 330 Madison Avenue, New York, NY 10017, by telephone at (212) 518-9544, or by email at [email protected], and Chardan Capital Markets, LLC, One Pennsylvania Plaza, Suite 4800, New York, NY 10119. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities being offered, nor shall there be any sale of the securities being offered in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction. About Forte Forte Biosciences, Inc. is a clinical-stage biopharmaceutical company that is advancing FB102, which is a proprietary anti-CD122 monoclonal antibody therapeutic candidate with potentially broad autoimmune and autoimmune-related indications. Forward Looking Statements Forte cautions you that statements included in this press release that are not a description of historical facts are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as 'may,' 'will,' 'should,' 'expect,' 'plan,' 'anticipate,' 'could,' 'intend,' 'target,' 'project,' 'contemplates,' 'believes,' 'estimates,' 'predicts,' 'potential' or 'continue' or the negatives of these terms or other similar expressions. These statements are based on the Forte's current beliefs and expectations. Forward-looking statements include statements regarding the completion and timing of the offering and the anticipated use of proceeds from the offering. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties, which include, without limitation: whether or not Forte will be able to raise capital through the sale of securities or consummate the offering; the final terms of the offering; the satisfaction of customary closing conditions; prevailing market conditions; general economic and market conditions as well as geopolitical developments; and other risks. Additional risks, uncertainties, and other information affecting Forte's business and operating results are contained in Forte's Quarterly Report on Form 10-Q filed on May 15, 2025, and in its other filings with the Securities and Exchange Commission. All forward-looking statements in this press release are current only as of the date hereof and, except as required by applicable law, Forte undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements are qualified in their entirety by this cautionary statement. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Source: Forte Biosciences, Inc. View source version on CONTACT: Forte Biosciences, Inc. [email protected] KEYWORD: UNITED STATES NORTH AMERICA TEXAS INDUSTRY KEYWORD: BIOTECHNOLOGY GENERAL HEALTH INFECTIOUS DISEASES HEALTH PHARMACEUTICAL SOURCE: Forte Biosciences, Inc. Copyright Business Wire 2025. PUB: 06/25/2025 12:28 AM/DISC: 06/25/2025 12:27 AM
Yahoo
an hour ago
- Yahoo
Apple stock has severely lagged the rest of the Mag 7. BofA says a rumored AI deal could turn it around.
Apple is rumored to be conducting internal talks about acquiring AI startup Perplexity. Thus far, Wall Street has been unimpressed by Apple's AI strategy. An AI acquisition could be a lifeline for Apple's stock, which has tumbled this year, says BofA. It's been a rough year for Apple stock, but there might be hope for a rebound with a rumored AI acquisition. Apple has been the worst-performing Magnificent Seven stock in 2025, with shares down 20% year-to-date. On top of weak iPhone sales and tariff concerns, the company has lagged in the AI race among its mega-cap tech peers. At Apple's WWDC earlier this month, the company failed to ease Wall Street's concerns about its Apple Intelligence product, with investors bemoaning the company's lack of a new killer app. However, Apple executives could be eyeing a purchase of AI startup Perplexity, Bloomberg reported last week. While Perplexity has denied any M&A discussions and Apple has declined to comment, Wall Street didn't ignore the buzz. Bank of America believes a deal could throw a lifeline to Apple's thus-lacking AI strategy and turn the stock around. If you can't make your own special AI sauce, buying it might be the next best option, according to BofA. The bank said that, in the near-term, "we think any positive developments around AI initiatives would be positive for the stock that has largely been seen as an AI laggard." Perplexity is an AI-powered search engine that responds to queries with cited responses, as opposed to a Google search that returns links. If completed, the acquisition would provide Apple with a more comprehensive AI offering instead of building one out in-house over years. A strategic partnership, as opposed to an outright acquisition, could also help Apple to a lesser degree. "Any such deal (we do not have any direct knowledge of the probability of such a deal) would likely be positive for shares that are currently in the penalty box given Apple is largely viewed as an AI laggard (deep Siri integration delayed and no cutting edge models)," Wamsi Mohan, technology research analyst at Bank of America, wrote. An acquisition would give Apple access to Perplexity's search and answering capabilities, fresh AI talent, product synergies with Siri and other Apple offering, and exposure to non-Google search, Mohan highlighted. Specifically, Perplexity could revitalize Siri's capabilities, which have struggled to keep up with developments in chatbots. Perplexity could also be integrated with not just Safari but also system-wide, helping Apple build AI into its services and hardware. All of these factors could fetch a higher valuation for Apple stock. Most importantly, an acquisition would provide Apple with a clear AI strategy and prevent Perplexity from being acquired by a competitor. Competition in the AI space is fierce, and Apple certainly isn't alone in pursuing a potential M&A or acquihire strategy. As Big Tech companies scramble to grab market share in the rapidly developing AI industry, growing through inorganic means is becoming more common. Before Meta invested $14.3 billion into data annotation startup Scale AI, it also tried to acquire Perplexity and another AI startup called Safe Superintelligence. But that's not to say that locking down a hot AI startup like Perplexity would solve all of Apple's problems. Integrating a young startup into a larger, more-established company comes with its fair share of organizational challenges, and Mohan pointed to some of Apple's previous M&A ventures, such as Siri or Laserlike, as examples of acquisitions that experienced delays or roadblocks. Apple will need to customize parts of Perplexity's platform to fit into its existing ecosystem and scale up to Apple's much larger user base. There are also legal risks: Perplexity is facing a copyright infringement case, which Apple would need to take on in the case of an acquisition. Buying Perplexity could also jeopardize Apple's existing partnership with Google, creating a potential headwind to earnings. Even with these concerns, Mohan is cautiously optimistic on the payoff of a potential acquisition: "From an investor's vantage point, a deal would offer a high-reward but high-risk proposition," he wrote. "However, execution, in our view, is paramount: Apple would need to break from some of its old habits (siloed development, extreme secrecy, slow rollout) to fully capitalize on Perplexity's fast-paced innovation," Mohan added. If completed, the acquisition would be Apple's biggest ever, as Perplexity is currently valued at $14 billion. It would also be a marked departure from the company's traditional free cash flow strategy of conducting stock buybacks and paying dividends. Bank of America believes Apple could certainly afford to shell out for a deal of this size, as the company posted profits of $24.8 billion in Q1 2025. A Perplexity deal would signal to investors that Apple is willing to shift its capital allocation strategy to compete in the AI race. "Given the transformative potential of AI, many analysts believe that not investing aggressively in AI is the bigger risk, even for a company as successful as Apple," Mohan wrote. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Is O'Reilly Automotive Stock a Millionaire Maker?
O'Reilly Automotive is a fast-growing auto parts retailer. The company is facing rising costs that have crimped net income. O'Reilly has seen many notable stock price pullbacks in its history. 10 stocks we like better than O'Reilly Automotive › Shares of O'Reilly Automotive (NASDAQ: ORLY) have risen more than 200% over the past five years. They have gained over 400% over the past decade. And over the past year alone the stock has rallied 25%, handily beating the S&P 500 index's (SNPINDEX: ^GSPC) gain of just under 10%. Given that stellar stock price performance, it is understandable that investors might be looking at the auto parts retailer. But is O'Reilly Automotive a millionaire-maker stock? Here's some things to consider before you buy. As noted, O'Reilly Automotive is an auto parts retailer, selling vehicle supplies to consumers and professionals. The auto sector is a mature industry, so competition is pretty intense. This is noteworthy because there are really only two ways to grow a retail store business. You can either increase sales at the stores you currently operate, known as same-store sales, or you can open new stores. Both, basically, have to pull customers from other competitors. With regard to same-store sales, O'Reilly has been doing reasonably well lately. Same-store sales in the first quarter of 2025 rose 3.6%. On the second point, the company opened 38 new stores. The combination led to a top-line advance of 4%. Earning per share rose 2%, but there's a little nuance here. Net income was down 2%; the only reason earnings per share grew was because the company's share count fell thanks to a stock buyback. The big problem right now is rising costs, particularly on the employee front. That inflation is hampering the company's growth and investors have noticed, with the shares having pulled back a little from recent highs. That said, O'Reilly isn't pulling back on its long-term growth aspirations, with plans to open as many as 210 new locations in 2025. It believes that same-store sales will increase between 2% and 4%. O'Reilly has executed well for years, so there's no reason to believe it can't achieve those two goals. But the need to rely on a stock buyback to spur earnings growth in the first quarter isn't a positive sign. The big problem with O'Reilly Automotive right now is that it is historically expensive. To put some numbers on that, the company's price-to-sales and price-to-earnings ratios are both well above their five-year averages. And while the stock price has pulled back of late, the decline is less than 10% and that modest drawdown is from the stock's all-time high. So investors looking at O'Reilly Automotive today have to consider both the business and the price they are paying for that business. To paraphrase famed value investor Benjamin Graham, even a great company can be a bad investment if you pay too much for it. Right now, O'Reilly Automotive looks like it is facing some business difficulties in a very competitive industry and, at the same time, the stock appears to still be quite expensive. In other words, it is hard to suggest that buying O'Reilly Automotive today will help to quickly build your nest egg to seven figures. That's not to suggest that the company can't work through the current headwinds, leading to the stock heading higher again. But there could be a period of weakness here as management deals with the cost issues it is facing. You might have to live through an even deeper pullback if you buy it now, noting that the chart above shows that 25%, or larger, drawdowns are pretty common for O'Reilly Automotive's stock. All in, O'Reilly Automotive is a well-run retailer with a stock that still appears to be pricing in a lot of good news. That remains true even as the company is facing cost pressures that have limited its earnings growth. If the company continues to execute as well as it has historically, the stock could continue to be a strong performer over the long term. And that would make it worth buying and holding. However, if you aren't willing to sit through a deep pullback, like the ones that have commonly happened in the past, you will probably be better off waiting. A pullback of 25%, more than twice the current drawdown, would be a better entry point for most investors. Before you buy stock in O'Reilly Automotive, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and O'Reilly Automotive wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $883,692!* Now, it's worth noting Stock Advisor's total average return is 793% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Is O'Reilly Automotive Stock a Millionaire Maker? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
