On Friday, Qualcomm Inc. (NASDAQ:QCOM) shares edged slightly higher after Canaccord Genuity analysts raised their price target from $200 to $225 per share. Analyst Michael Walkley cited the company’s contract with Apple and new business with Android phone makers will boost 5G sales in the future.
Despite a recent spike in the QCOM stock price, shares are flat this year, leaving more room to run. In addition, QCOM is up just 30% over the last 12 months compared to 35% gains in the tech-heavy NASDAQ 100 index.
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Therefore, it seems Qualcomm could be underperforming the market, thereby creating an opportunity for the stock price to rise higher.
Why invest in Qualcomm shares in Q3 2021?
From a valuation perspective, Qualcomm shares trade at an exciting P/E ratio of just 18.54. Furthermore, the forward P/E ratio is lower at 15.90, while the PEG ratio of just 0.57 implies significant earnings growth expectations over the next five years.
According to analyst estimates, Qualcomm earnings will grow by 25.8% this year before rising at an annual average rate of 32.2% through 2026. Furthermore, QCOM shares trade at a dividend yield of 1.85%, which is impressive for a high-growth stock.
Therefore, it may be worthwhile to invest in Qualcomm shares now ahead of the exciting growth prospects.
Technical overview: QCOM stock price predictions for August 2021
Technically, Qualcomm shares appear to have recently bounced off the trendline support of an ascending channel formation. However, the stock is yet to reach overbought conditions after the rebound, leaving more room for a continued uptrend.
Therefore, investors can target extended rebound profits at approximately $150.52 or higher at $152.32. On the other hand, the critical support levels are $146.75 and $144.43 in the short term.
Bottom line: the case for buying Qualcomm shares now
In summary, Qualcomm shares seem to be trading within an ascending channel formation in the intraday chart, indicating a bullish bias in the market. However, the bull run appears set to continue further before reaching overbought conditions.
Therefore, it may be best to buy QCOM stock before it hits the critical resistance levels, beginning a pullback.
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