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Qualcomm’s Soaring Automotive Revenue: Boosting Market Capitalization and Outpacing Rival Nvidia

Qualcomm’s automotive revenue has been consistently increasing, with $603 million reported in the second quarter of fiscal 2024, representing a 35% year-over-year growth. In contrast, Nvidia’s revenue from the automotive segment in fiscal 2024 was $1.1 billion, an increase of 21% compared to the previous year. However, Nvidia’s automotive revenue decreased by 4% in the final quarter of the fiscal year, indicating a relatively weaker performance in this segment.

Qualcomm’s automotive business accounted for 6.5% of its total revenue in the second quarter of fiscal 2024, compared to 4.8% in the same period last year. This segment also appears to have a promising future, as Qualcomm’s automotive design win pipeline reached $45 billion in the second quarter, marking a 50% increase from the preceding year’s level.

Additionally, Qualcomm anticipates that its automotive business will continue to outperform the market, growing at a faster rate than the end market. Third-party projections suggest that the automotive chip market will expand at an annual compounded growth rate of over 10% through 2032, generating a revenue of $128 billion.

Qualcomm expects its automotive revenue to surpass $4 billion annually by fiscal 2026, almost doubling the revenue generated from this segment in fiscal 2023. As a result, analysts have revised their growth forecasts for Qualcomm, taking into account these favorable developments. Assuming a sales multiple of 7 times, which is in line with the average for US technology firms, Qualcomm’s market capitalization could reach $312 billion, representing a 55% increase from its current value.

Therefore, given Qualcomm’s impressive automotive performance and revenue growth prospects, investors seeking growth opportunities may find it beneficial to consider purchasing Qualcomm shares immediately, as it offers several promising catalysts while remaining less expensive than rival Nvidia, which is currently trading at an expensive 37 times sales.

Overall, Qualcomm’s automotive business presents an exciting investment opportunity due to its rapidly expanding market size and potential for significant revenue growth over the coming years.

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