Qualcomm just did something that made Wall Street forget about inflation, interest rates, and everything else that’s been keeping traders up at night. The chipmaker’s stock surged on Wednesday after it unveiled new revenue targets and announced a partnership with Meta Platforms that has analysts reaching for thesaurus to find new ways to say “bullish.”
The Numbers That Matter
Let’s cut through the jargon. Qualcomm said it expects revenue to hit $40 billion by fiscal 2028. That’s not a typo. It’s a 30% jump from what analysts were forecasting for this year. The company also lifted its long-term earnings forecast, projecting adjusted earnings of $12 per share by 2028. For context, that’s roughly double what it earned in 2023.
But here’s the kicker: Qualcomm’s automotive business — once an afterthought — is now projected to bring in $9 billion annually by 2028. That’s up from just $1.5 billion last year. If you’re not paying attention to the car chip market, you should be. Every automaker from Ford to Ferrari is stuffing more silicon into vehicles, and Qualcomm is the one selling the shovels.
The Meta Magic
The real fireworks came from Qualcomm’s announcement that it’s deepening its relationship with Meta. The two companies are collaborating on a new generation of custom chips for Meta’s augmented reality (AR) and virtual reality (VR) devices. Think Quest headsets and whatever Zuckerberg’s been cooking up in his lab.
“This isn’t just a licensing deal — it’s a bet on the future of computing,” said one analyst who asked not to be named because his compliance department hasn’t finished vetting his enthusiasm.
Meta is Qualcomm’s biggest customer in the XR space, and this partnership locks in that relationship for years. For Qualcomm, it means predictable revenue from a company that’s spending billions on the metaverse. For Meta, it means chips that are optimized for its specific needs — because nothing says “competitive advantage” like silicon that’s custom-built for your walled garden.
The Skeptic’s Corner
Before you dump your life savings into Qualcomm stock, let’s pump the brakes. Revenue targets are great, but they’re not guarantees. The smartphone market — Qualcomm’s bread and butter — is still stuck in neutral. Global handset shipments grew just 2% last quarter. That’s not a boom; it’s a yawn.
And the automotive business? It’s growing fast, but it’s starting from a low base. $9 billion by 2028 sounds impressive until you realize Qualcomm’s overall revenue could be $40 billion. Cars are a nice side hustle, but they’re not replacing phones anytime soon.
Then there’s the Meta partnership. Meta is a fickle friend. It has a history of developing its own chips — remember the Meta Training and Inference Accelerator? If Zuckerberg decides to go full Apple and build his own silicon, Qualcomm could be left holding the bag. The partnership is exclusive for now, but exclusivity has a shelf life in tech.
The Bigger Picture
Qualcomm’s stock jump is a reminder that in the chip business, narrative matters as much as numbers. The company is selling a story of diversification: from phones to cars to AR/VR. It’s a compelling narrative, but it’s not a sure thing.
What is sure is that Qualcomm has cash — lots of it. The company announced a $10 billion stock buyback program alongside the revenue targets. That’s a classic move to keep shareholders happy while management tries to execute on the grand vision. Buybacks don’t build products, but they do boost earnings per share, which is what Wall Street loves.
The Verdict
Qualcomm’s Wednesday surge is a bet on the future. If you believe that AR/VR will be the next computing platform, that cars will become smartphones on wheels, and that Meta will keep spending billions on the metaverse, then the stock looks cheap. If you think the smartphone cycle is dead and that Zuckerberg’s metaverse is a money pit, then you’re probably shorting it.
Me? I’m watching the numbers. $40 billion by 2028 is a big number, but so was Theranos. Execution is everything. Qualcomm has a good track record, but the chip industry has a short memory. For now, the market is buying the hype. Just remember: when everyone is cheering, it’s usually time to check your seatbelt.
