Qualcomm leads edge AI platforms on Huawei deal, says Baird

Investing.com -- Baird analyst Tristan Gerra has reiterated his bullish stance on edge AI platforms, highlighting Qualcomm Incorporated (NASDAQ: QCOM) as the top pick in the sector following a significant cross-licensing agreement with Huawei. The analyst maintains an Outperform rating on the stock and has set a price target of $400.

1. Qualcomm Incorporated (QCOM)

Qualcomm and Huawei announced a multi-year, broad patent agreement spanning 5G, compute, AI, and networking technologies. Under the deal, Qualcomm agreed to purchase certain Huawei U.S. patents in compute, AI, networking, and other technologies. Following the close of the Qualcomm agreement, Huawei expects the overall contract value of all its patent licensing agreements to exceed $6.9 billion.

Gerra believes the Huawei cross-licensing agreement positions Qualcomm well for upcoming edge AI content on Huawei hardware platforms. The analyst noted that Qualcomm recently announced the renewal of its QTL licensing agreement with Apple, further strengthening its licensing portfolio.

Baird reiterated its Bullish Fresh Pick stance on Qualcomm, expecting agentic AI to enter edge computing as a secular growth driver where Qualcomm can leverage its dominant compute position. The analyst highlighted that novel AI architectures position Qualcomm well in AI inference over time.

The $400 price target is based on Qualcomm shares trading at 20 times Baird's fiscal 2030 projected earnings per share estimate of $20.00. The multiple is above the average 14 times next-twelve-month price-to-earnings ratio, due to Qualcomm's accelerating diversification away from smartphones and agentic AI catalysts across platforms.

Gerra identified several risks for Qualcomm, including customer concentration, threat of vertical integration, geographic risks, and possible delays in 5G rollouts. Qualcomm is one of the world's largest wireless technology companies, leading the development and commercialization of 3G, 4G, and 5G technologies in smartphones and other connected devices.

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