4. QUALCOMM Incorporated (NASDAQ:QCOM)
QUALCOMM Incorporated (NASDAQ: QCOM) ranks fourth as one of the cheapest profitable semiconductor stocks with exposure to several major AI markets. Although it remains closely associated with smartphone processors and wireless communications, management is building a much broader business covering personal computers, automobiles, industrial systems, robotics and data centers.
The company’s advantage is efficient computing at the edge. Not every artificial intelligence request can be sent to an enormous cloud server. Smartphones, computers, vehicles, cameras and robots increasingly need to process information locally. On-device AI can reduce latency, improve privacy and lower the cost of constantly transferring data to remote data centers.
Management expects non-handset operations to become a much larger part of the company. Its fiscal 2029 objectives include more than $15 billion in data-center revenue, $10 billion in automotive revenue and more than $14 billion in Internet of Things revenue. The industrial, networking and robotics portion of that IoT target is expected to contribute approximately $8 billion.
At around $168.74 per share and roughly 19.3 times trailing earnings, the stock is valued well below many prominent AI semiconductor companies. It also produces substantial profits, pays a dividend and benefits from a valuable wireless-technology licensing business.
The risk is that smartphones still represent an important source of revenue. Competition in data-center processors is fierce, and management’s 2029 targets are ambitions rather than guaranteed results. If the diversification strategy succeeds, however, investors could gain exposure to edge AI, automotive technology, robotics and data-center computing through a single relatively inexpensive stock.
