Qualcomm 'At The Center' Of 5G Revolution, Baird Says

Qualcomm, Inc. QCOM is well positioned to take advantage of the 5G revolution in 2021 and beyond, according to Baird.

The Qualcomm Analyst: Tristan Gerra initiated coverage of Qualcomm's stock with an Outperform rating and $200 price target.

The Qualcomm Thesis: Qualcomm is "at the center" of the 5G cycle and stands to benefit from an expansion beyond just smartphones to end markets like automotive and the Internet of Things (IoT), Gerra wrote in the note.

Next year alone the 5G phone market is expected to double in size, Gerra said, and Qualcomm will directly benefit as it provides components in 5G devices. In fact, Qualcomm has multi-year licensing agreements with each of the major smartphone makers.

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Qualcomm will also benefit from its exposure to China. The country is seeing an increase in 5G adoption as the next-generation devices accounted for 68% of all smartphone sales in November.

Over the longer-term, Qualcomm can leverage its leadership position in 5G technology to enter new applications and end markets, including manufacturing, retail, healthcare, energy, logistics, and gaming, the analyst wrote. These are all industries where 5G is "expected to make inroads" and represents a "massive" opportunity for Qualcomm.

QCOM Price Action: Shares of Qualcomm were trading higher by 1.5% to $148.57 at publication time.