Qualcomm (QCOM) is a semiconductor stock with a market cap of $95B. It made a historic move this year in May when it rose from $57 to $88 in just one week. It is known that Qualcomm is a 5G player. So, as soon as the 5G hype starts getting real we expect QCOM to go strongly higher! That’s our investing thesis, and that’s the basis on which we write this Qualcomm (QCOM) stock forecast for 2020 and 2021. Note this is one of the fewer stock specific forecasts we do as part of our series of annual global market forecasts.
Qualcomm Stock Forecast: The Leading Indicators
First, as said in our 2020 forecasts we predict a bullish year for global equities, in particular US equities.
To illustrate this we refer to our Dow Jones Forecast For 2020 And 2021 (32,000 Points). Indeed we expect the Dow Jones to hit 32, 000 points in 2020!
This obviously is a leading indicator for semiconductor stocks like Qualcomm.
Second, the 5G sector should take off in 2020. This will be THE most important leading indicator for our Qualcomm stock forecast: sector strength.
We have not seen any sector strength in the 5G sector yet. We expect at ‘a’ certain point in time to see massive inflows in that sector. That’s when we want to get in, it doesn’t make too much sense to be invested way too early.
As pointed out by Barron’s:
Qualcomm’s (ticker: QCOM) next chapter is all about the ramping up of 5G networks and equipment. J.P. Morgan ’s Samik Chatterjee sees an acceleration in Qualcomm’s 5G-related revenue beginning next year.
Note that Qualcomm also forecasted a growth trajectory for 5G handsets as per Reuters:
Qualcomm said 5G adoption will be faster than 4G due to the timing of commercialization of the technology in China and availability of chipsets across different price tiers. Going by Qualcomm’s previous forecast of a range between 175 million and 225 million 5G devices for next year, the 2021 forecast suggests 125% growth from the midpoint of the 2020 outlook.
The 2nd leading indicator will help us with the timing of an entry, the 1st leading indicator is meant to confirm the bullish big picture conditions.
Qualcomm Stock Forecast Quote From Last Year
This is what we wrote in our article in May 2018:
Recently the stock price of Qualcomm experienced an exodus of confidence due to blocking of Broadcom’s intention to acquire Qualcomm. Be that as it may, Qualcomm experienced a formidable run from 1992 till 2000. Since then price has been consolidating into a triangle for the past 18 years or so. As long as the price does not break below 48, we consider Qualcomm in a consolidation phase.
We continued: “As seen on the weekly chart Qualcomm was trading at $50. The long term moving average was flat. Why would anyone buy this stock with the bad news that we mentioned above?”
Qualcomm is the type of stock that even in a bad year like 2018 went so much higher. It’s the type of long term holding in your portfolio that you want to invest more in once the 5G hype starts.
This is what we wrote last year: “Together with the bullish power that comes with the breakout out of the 18-year consolidation pattern we are on record with a Qualcomm price forecast for 2019 of $95 to $100.”
QCOM hit 95 USD, and even though it corrected it still looks very bullish, continue reading to understand why!
Qualcomm Stock Forecast For 2020 And 2021: The Weekly Chart
Financials of QCOM look great as seen here.
We are not concerned about financials but we need the charts to guide us for the right entry.
The weekly QCOM chart goes first.
What we see is a bullish setup, which obviously confirms our bullish Qualcomm stock forecast for 2020 and 2021.
This horizontal breakout is powerful. Note that early this year there was a failed attempt. The breakout did not hold after 3 consecutive weekly closes!
Now we see this 4th consecutive week above 80 USD. This is as closes as a breakout confirmation can get.
Qualcomm Stock Forecast For 2020 And 2021: The Monthly Chart
The monthly chart is truly spectacular!
As a rule of thumb as per our 100 investing tips we apply this saying: The higher the base the higher in space.
This really means that the longer a consolidation pattern the higher the upside potential.
That’s why horizontal breakouts are the most powerful of all chart setups. That’s why the QCOM monthly chart is so spectacular.
Once the 83 USD is cleared for 3 consecutive weeks and 3 consecutive months there is no resistance. We expect a sharp move higher in 2020 based on this amazing chart setup.
The flipside of this story is QCOM falling back below 83 USD. This would most likely delay our bullish forecast, not invalidate.
Qualcomm Prediction with Long Term Price Target
Given all indicators mentioned above we expect QCOM to rise to $125 somewhere in 2020 or 2021.
Longer term the stock price of QCOM may rise even further. We have to revise our stock forecast after the market hits $125. The most important thing we have to take into account is the potential 5G hype we expect to see in 2020 or 2021. It will be the ultimate driver of a much higher price forecast for QCOM.