QCOM stocks dropped by 9% the day after its quarter earnings report was released. According to the report, revenues grew by 22% year-on-year to $11.4 billion, while EPS hit $3.13 vs $0.78 a year ago. Smartphones are still generating most of the revenues as Apple and Samsung decided to return to Snapdragon chips and the demand for 5G is growing. However, other business segments of Qualcomm are expanding too, including the auto industry segment and Internet of things (IoT).

The financial year of 2022, that ended on September 25, made $1.4 billion ($975 million a year before) from chips sold to automakers. The company forecasts that this segment will expand to $4 billion by 2026. Apple is thought to use its own solutions for a long time and is not expected to be churning out Qualcomm products until 2024. Samsung is planning to continue using Snapdragon chips in 100% of its smartphones that allows Qualcomm to balance risks from a possible Apple withdrawal.

QCOM shares are trading at September 2020 levels and this is not providing a justified valuation of its business. Qualcomm is delivering better results and has realistic growth projections.