Qualcomm stock (NASDAQ:QCOM) is one investment that investors may want to purchase by the bucketload right now, particularly with the company’s recent report indicating a significant acceleration in its automotive industry.
Qualcomm’s Automotive Pipeline Has Increased.
Qualcomm (QCOM) said in a press release on September 22 that its design win pipeline in the automotive sector has now expanded to $30 billion due to the rising usage of its Snapdragon platform in the car industry. The design win pipeline “reflects the present expected future size of awarded automobile projects, based on projections supplied directly by automakers and Tier-1 suppliers,” according to the announcement.
Simply put, a design victory implies that manufacturers have chosen Qualcomm’s processors for their automobiles or other automotive platforms. Qualcomm (QCOM) will begin to generate money from these design victories once the devices or platforms are in production. It is worth mentioning that Qualcomm’s automotive design win pipeline was at $19 billion after fiscal 2022’s third quarter, which ended on June 26, 2022.
So Qualcomm’s potential automotive revenue pipeline has increased by over 60% in only one quarter. More crucially, the improved revenue potential indicates that the chipmaker’s automotive sector might take off big time in the next quarters, moving the needle for the firm in a greater manner.
Qualcomm’s automotive sales increased 38% year on year to $350 million in fiscal Q3. Last quarter, the division accounted for little more than 3% of the company’s revenue. Qualcomm aims to end fiscal 2022 with $1.3 billion in automotive revenue, a 33% increase over last year.
More crucially, because of its $30 billion pipeline, the corporation is optimistic about long-term development in the automotive market. The automotive business is expected to produce more than $4 billion in revenue in fiscal 2026 and more than $9 billion in fiscal 2031 for Qualcomm. The corporation anticipates a tenfold increase in yearly automobile revenue during the next decade.
It would not be shocking, nevertheless, if the automotive industry became considerably more significant in the long term than Qualcomm anticipates currently since its pipeline may expand more. This is due to Qualcomm’s extensive ecosystem of automakers, component manufacturers, telecom firms, smartphone manufacturers, and e-commerce suppliers, among others, who collaborate with it to implement automotive solutions.
Investing in QCOM stock is a no-brainer.
This year’s stock market sell-off has fallen severely on QCOM stock (NASDAQ:QCOM), with the company’s shares losing a third of their value. Consequently, QCOM stock (NASDAQ:QCOM) is presently trading at just 10.7 times trailing earnings.
The chipmaker is forecast to end fiscal 2022 with a 32% increase in sales and a 47% increase in profitability. So QCOM stock (NASDAQ:QCOM) seems inexpensive compared to its current remarkable growth.
Featured Image – Unsplash © vishnumaiea