Qualcomm's Data Center Growth Ignites Bullish Sentiment

Qualcomm's (NASDAQ:QCOM) recent performance and growth prospects are being overlooked by investors, who continue to value the company primarily as a supplier of smartphone chips. However, the company is rapidly expanding its presence in the data center market, with management expecting revenue from this segment to reach $15 billion by fiscal 2029.

The company's automotive business has also experienced significant growth, with revenue increasing 61% year over year. This strong performance has led Qualcomm's CEO, Cristiano Amon, to raise the long-term non-handset target to $40 billion by fiscal 2029.

Bulls see a potential breakout in Qualcomm's stock price to $245+, driven by the company's growing presence in the data center market and accelerating growth in its automotive business. However, there are also risks associated with the company's reliance on Apple (NASDAQ:AAPL) and the potential impact of memory-driven input cost inflation and QCT gross margin pressure.

Qualcomm's price target is $228.68 over the next 12 months, implying 16.27% upside from its current price of $194.38. The company's data center revenue ramp is expected to be cautious, but if it executes on its plans, it could lead to significant upside in its stock price.