SAN DIEGO, California – In the past year, the semiconductor industry has seen significant growth and investment opportunities. The iShares Semiconductor ETF has increased by more than 44% in the past year, outperforming the S&P 500 by a large margin.

While companies like Nvidia, Broadcom, and Advanced Micro Devices have received a lot of attention due to their artificial intelligence prospects, Qualcomm has quietly seen a 6% increase in its share value over the same period. After reporting a substantial beat in Q1, analysts are now predicting double-digit earnings growth for the company this year.

Qualcomm’s continued dominance in the handset market has been a key factor in its success, with the company’s innovative products driving growth in sales and performance metrics. As the technology landscape evolves, Qualcomm’s latest generation Snapdragon positions the company competitively for the next stage of the handset evolution, particularly in the AI-enabled smartphones segment.

In addition to its success in the handset space, Qualcomm has also diversified into other end markets such as Internet of Things (IoT) and Automotive segments, both of which have achieved annual run rates of over $1 billion. This diversification strategy is seen as a prudent long-term plan as demand for IoT and automotive technologies is expected to grow significantly in the future.

In Q1 of 2024, Qualcomm’s bottom line saw a substantial increase due to strong demand and supply chain issues across the semiconductor industry. Despite challenges in 2023, the company’s Q1 results have validated Wall Street’s bullish outlook, with earnings per share (EPS) of $2.75, up 16% from the previous year.

Looking ahead, Qualcomm’s guidance for Q2 and its potential for strong double-digit growth for the full year have led to cautious optimism among investors. With the stock trading at a slight discount to historical fair values and a 20-year track record of growing dividends, Qualcomm’s long-term growth potential remains attractive.

While Wall Street consensus points towards strong EPS growth in 2024 and 2025, rising competition in the handset space and unproven segments like IoT and automotive pose some risks. As a result, the current valuation of Qualcomm is near fair value, leading to a “hold” recommendation for investors.

Overall, Qualcomm’s solid performance in Q1 and its updated guidance for Q2 set the stage for a positive year in 2024. However, with increasing competition and a lack of some secular growth tailwinds, investors may want to approach Qualcomm with cautious optimism.