Baird analysts added Qualcomm (NASDAQ:) inventory as a “Bullish Fresh Pick” and raised the goal price on the inventory to $250.
The revision comes as Baird’s preliminary channel suggestions revealed a procurement items estimate of greater than 90 million for the upcoming iPhone 16, marking a notable uptick from the low 80 million procurement items of prior iPhone launches.
“Similar to the Galaxy S24 launch earlier this year, AI is the driver,” analysts mentioned in a observe.
“We expect strengthening demand trends in Qualcomm’s handset business in C3Q post a C2Q seasonal trough and post a C1Q trough in YoY comps,” they added.
Baird’s staff believes that AI will drive double-digit will increase in Qualcomm’s common promoting costs (ASPs) for varied elements, starting with the iPhone 16 within the second half of this yr.
Furthermore, preliminary AI content material in high-end telephones from Chinese language smartphone OEMs will contribute, adopted by the next-generation Galaxy platform within the first half of 2025.
Radio Frequency (RF) ASP and content material are additionally anticipated to profit from AI beginning within the second half, fueled by increased efficiency, sooner uplinks, and better integration.
From a unit standpoint, analysts mentioned Qualcomm is ready to realize from each RF share will increase, initially reported by Skyworks, at Apple (1-1.5GHz), together with preliminary shipments to Chinese language smartphone OEMs for lower-end telephones, which is able to displace native suppliers of discrete RF elements.
The funding agency additionally famous an preliminary robust response for Qualcomm’s Snapdragon X Elite processor in South Korea, because the chipmaker is the primary to market within the preliminary wave of AI in PCs.
Samsung has launched Copilot+ PCs based mostly on the X Elite, with demand surpassing preliminary channel expectations, Baird famous. In addition to Samsung, the X Elite can also be presently being shipped by HP, Dell, Acer, Microsoft, and Lenovo.
“We would be buyers of QCOM shares on recent share pullback,” analysts concluded.