Qualcomm: Raising Our Fair Value Estimate to $180 From $140 on a Bit More PC Optimism

We are raising our fair value estimate for narrow-moat Qualcomm to $180 per share from $140, as we have come away impressed with the company's design wins, and Microsoft's support, for artificial intelligence PCs that will deploy Qualcomm's Snapdragon Elite central processing units, or CPUs. We still view shares as overvalued, as we don't foresee overwhelming growth in Qualcomm's core smartphone business and we're hesitant to model a massive shift in market share toward Qualcomm CPUs and away from x86 CPUs from Intel or AMD. Still, we concede the ecosystem support around Qualcomm-powered PCs (and perhaps Windows PCs running on any ARM-based processor) has been greater than what we previously envisioned.