Qualcomm Undervalued Stock

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Qualcomm Undervalued Stock

Qualcomm (Qcom) Is An Undervalued Stock

The average P/E of the Nasdaq is around 33.8. Although it is a little high compared to the FTSE 100, it does contain a lot of high-growth stocks.

But, there's one stock that has an even lower P/E ratio than the Nasdaq. Yes, we are talking about Qualcomm (QCOM), a big name in the US semiconductor space. So far, the share price of Qualcomm (QCOM) is down by 4% which makes it an even more interesting stock.

Qualcomm (Qcom) P/E Ratio Is 15.81

The company makes semiconductors, which are used in automotive systems and smartphones. Also, they have a healthy portfolio in the wireless communication sector. This includes the 3G, 4G, and even the 5G standard, which makes Qualcomm (QCOM) such a good option.

The main profit engine of Qualcomm (QCOM) is its licensing segment. Meanwhile, the sales from semiconductors are what're helping the company to scale and improve its cash flow.

But there are two things that make it a good choice to buy the Qualcomm (QCOM) stock. First is the low P/E ratio of QCOM as compared to the Nasdaq's index P/E. The second is the AI boom, which could help the Qualcomm (QCOM) stock rally in the next few years.

The P/E of Qualcomm (QCOM) is around 15.81, which is very good and cheap. Also, the cash flow of Qualcomm (QCOM) is very solid, which means it can continue to make more investments. So, there's a lot of potential for Qualcomm (QCOM) in AI chips, automotives, and other sectors.

But Qualcomm (QCOM) faces a risk of high geopolitical exposure from China. Almost 50% of Qualcomm's annual sales are from China.

So, if the US places new trade restrictions on China, it could affect the bottom line of Qualcomm (QCOM) stock. But despite this risk, there's no doubt that Qualcomm (QCOM) stock remains a solid and undervalued stock.

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