Investing.com -- Goldman Sachs has begun coverage of Qualcomm with a Neutral rating and a 12-month price target of $135, saying the chipmaker’s push into automotive and industrial markets is being offset by headwinds in its core smartphone business, leaving the stock with limited near-term upside.

The bank’s price target implies roughly 6% upside from Qualcomm’s closing price of $127.11 on Friday.

Goldman analyst James Schneider noted the stock is already trading at about 12x forward earnings, roughly two times below its three-year median multiple of 14x, and said he sees balanced risk/reward at current levels.

The smartphone fears center on two fronts. Qualcomm has been gradually losing share in the premium segment at Chinese handset makers to MediaTek, which has narrowed the performance gap between its high-end chips and Qualcomm’s Snapdragon processors. Goldman forecasts roughly 200 basis points of revenue share loss to MediaTek in the Android market through 2027.

At the same time, Apple’s transition to internally designed modems is an accelerating headwind. The bank models Apple’s contribution to Qualcomm’s chip business declining from roughly $7.2 billion in fiscal 2025 to $1.9 billion in fiscal 2027, and nearly disappearing by fiscal 2028.

“Apple has progressed well on its internal-modem strategy, and we expect increasing use of internal modems for future iPhone generations,” Schneider said.

Near-term demand is also a concern. Goldman expects smartphone industry unit volumes to decline 6% year-on-year in 2026, pointing to rising memory costs driven by AI-related demand as a drag on consumer spending.

On a more positive note, Schneider is upbeat on Qualcomm’s automotive segment, where the company has built a strong position in digital cockpit solutions and grown its automotive revenues fivefold since 2020.

The analyst forecasts automotive revenue growing at a 22% compound annual rate from fiscal 2025 to 2028. Industrial Internet of Things (IoT) is also seen recovering, with Goldman modeling 20% growth in fiscal 2026.

“We see Qualcomm’s diversification efforts partly offsetting these headwinds, driven by strength in automotive and industrial IoT,” Schneider wrote.

On Qualcomm’s PC and datacenter ambitions, the analyst flagged software compatibility as a persistent obstacle to broader adoption of ARM-based Windows PCs.

“We await more details on the company’s execution on its newly launched datacenter product line, but note an increasingly crowded field of competitors and limited customer traction thus far,” Schneider wrote.

“With the stock trading at 12X (2X below its three-year median), we see a balanced risk/reward for the stock at these levels,” he concluded.