Facing Potential Smartphone Weakness and Tough Competition, Qualcomm Stock’s Outlook Is Not Particularly Strong

Qualcomm (QCOM) has multiple, potential, strong, positive catalysts due to its exposure to the fast-growing auto chip and Internet of Things (IoT) sectors. Still, since the firm is facing tough competition in these areas, its catalysts may not turn out to be as powerful as some expect. Meanwhile, high flash-memory prices could put a big dent in the company's revenue from smartphone sales in the shorter term. Since smartphone sales in the company's last completed fiscal year generated about 63% of its overall revenue, the shares' overall outlook in the short-to-medium term is quite uncertain.

Indeed, Citi is cautious about the company's short-term outlook, as the bank recently placed “a downside Catalyst Watch” on the name "based on the potential weakness" of its smartphone sales.