Qualcomm has seen its stock fall by 15.9% over the last one-year period therefore, losing out to AI-based stock like Nvidia in an atmosphere that is marked by an extended chip boom.
Other industry competitors enjoy a booming data-center market, but Qualcomm is still in the business of mobile devices, and has been able to maintain strong profitability, but with a relatively low growth rate.
Profit Power Stands Tall
Qualcomm boasts of a return on capital of 27.2% in the past twelve months, and a free cash flow margin of 28.8%, which compares better than the personal-computer portion of Intel, is currently struggling to maintain.
Conversely, Nvidia reports a free-cash-flow margin of 58.8% with its AI GPUs products and Broadcom profit on the account of its diversified portfolio of AI-related products.
However, the operating cash flow of 14.39 billion and the free cash flow 12.93 billion used by Qualcomm are signals of strength in its handset and automotive divisions.
Growth Gap Widens
Qualcomm reported single-digit growth in its fiscal year Q1 2026 earnings, which reached $12.25 billion. With a meager 3% increase in headset sales and $7.82 billion in revenue, the QTC division expanded marginally. In contrast, the automotive division saw a more significant 15% growth, reaching $1.10 billion.
It is anticipated that Qualcomm’s FY Q2 2026 outlook will be below expectations, ranging between $10.2B and $11.0B., but still not the same data-center growth as seen with Nvidia and AMD.
The price to earning ratio of the company is of 29.0998 which seems to be warranted in comparison to the premium price bar of Nvidia, and reflects on the fears of the saturation of the mobile market.
On 23 February 2026, the stock traded at approximately $140.03, which is a significant drop over the recent peaks.
Revenue Growth Comparisons
Operating Margin Comparisons
P/E Ratio Comparison
Outlook: Steady Bet Ahead
Qualcomm is also working on AI-capable chips and they expect that the personal-computer market is going to recover and they may close the growth divide should the handset market turn back on them after the existing memory-chip crunch.
The company has a share buy-back and a forward price-to-earnings ratio below 30x and regulated supply, which makes it act as a stabilizing factor in comparison to the more volatile AI leaders.
Although Qualcomm might not be a market leader in the artificial intelligence industry, its strong cash flow, diversified fields of application, and average valuation make it a safer semiconductor investment in a market that so far is dominated by heightened momentum.
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