We recently published a list of 10 Best Very Cheap Stocks to Buy According to Billionaires In this article, we are going to take a look at where QUALCOMM Incorporated (NASDAQ:QCOM) stands against other best very cheap stocks to buy according to billionaires.
Coming off 2 years of healthy broader market performance (~26% total return in 2023, ~25% in 2024), the US Bank Wealth Management believes that the S&P 500 valuations kicked off 2025 at elevated levels. In 2025, stocks continue to face a volatile environment, and in mid-March, the S&P 500 index witnessed a correction (a fall of 10% or more). Despite this, the index’s expected P/E ratio remains marginally above the historic 5-year and 10-year average, says the firm. As per Rob Haworth, senior investment strategy director, U.S. Bank Asset Management, it’s critical that, in 2025, earnings growth remains on track.
Corporate Earnings Projections in 2025
US Bank Wealth Management believes that current market projections hint at the 11.5% S&P 500 earnings growth in 2025 versus the prior year. This number is subject to change. However, Terry Sandven, chief equity strategist for U.S. Bank Asset Management, mentioned that when considering the potential impact of tariffs and other issues, it is difficult to expect that 2025 earnings would meet the current projections. Haworth says that the impact of tariffs on company profits is expected to be mixed. Companies that are more dependent on importing goods manufactured overseas can witness more challenges.
In comparison, the smaller companies, which are not as dependent on foreign trade, are expected to be better placed to mitigate the impact of the trade environment. Because they are not selling in the foreign markets and are not relying on foreign goods, smaller companies can have more pricing power, opines Haworth. This can equate to a healthier earnings picture.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Technology Sector Remains Well-Placed
JPMorgan believes that uncertainty related to the trade and other factors of the US administration’s policy agenda continue to lead to a wait and see attitude from businesses and households. Given that household and corporate balance sheets remain relatively healthy, this attitude is expected to be consistent with a slowness in the broader US activity rather than a recession. Coming to the technology sector, in most part, the balance sheets are in healthy shape, with valuations based on forward earnings sitting at a decent place, says JP Morgan. As per the investment firm, these valuations still demonstrate anticipations for very strong 20%+ earnings growth from the US technology sector in 2025.
Our Methodology
To list the 10 Best Very Cheap Stocks to Buy According to Billionaires, we used a stock screener and Insider Monkey’s exclusive database of billionaire stock holdings to shortlist the companies that trade at a forward P/E of less than ~20.0x. For the stocks with the same number of billionaire holdings, we have used the number of hedge fund investors as a secondary metric to rank the stocks, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician testing the latest 5G device, demonstrating the company’s commitment to innovation.
QUALCOMM Incorporated (NASDAQ:QCOM)
Forward P/E as of March 28: ~13.1x
Number of Billionaire Investors: 19
Number of Hedge Fund Holders: 79
QUALCOMM Incorporated (NASDAQ:QCOM) is engaged in the development and commercialization of foundational technologies for the wireless industry. TD Cowen reiterated a “Buy” rating on the company’s stock, maintaining a price objective of $195.00. The firm’s analyst, Joshua Buchalter, exhibited confidence in the company’s ability to enhance business over and above its traditional handset market by using the intellectual property in compute and connectivity. QUALCOMM Incorporated (NASDAQ:QCOM)’s focus on leveraging the low-power and connectivity-focused product portfolio to tap high-growth opportunities in IoT and automotive sectors can fuel long-term growth. Overall, the reaffirmed price objective demonstrates the optimism and the expected benefits of the company’s diversification into new high-value markets.
While the broader AI PC market remains in the early stages, QUALCOMM Incorporated (NASDAQ:QCOM)’s expertise in low-power, high-performance computing can provide an edge in the emerging segment. Its Snapdragon processors can be well-suited for AI-enabled PCs requiring a balance of performance and energy efficiency. Also, QUALCOMM Incorporated (NASDAQ:QCOM)’s efforts in edge AI technology can open new opportunities across markets such as automotive, industrial IoT, and smart cities.
Nightview Capital, an investment management company that concentrates exclusively on publicly traded equity strategies, published its Q4 2024 investor letter. Here is what the fund said:
“Semiconductors are the unsung heroes of the modern economy, powering everything from AI and 5G to electric vehicles and renewable energy systems. Without them, innovation stalls. The semiconductor industry has entered a supercycle, driven by unprecedented demand across industries that rely on advanced computing. And while this notoriously boom and bust industry has seen cycles before we believe this cycle remains in relative infancy.
These advancements aren’t incremental. As AI systems scale, the need for cutting-edge semiconductors will only accelerate. We believe the companies at the forefront of this revolution are foundational to the next wave of global progress.
Qualcomm Inc. (QCOM): Core Opportunity: Qualcomm is transitioning beyond its traditional handset business, focusing on high-growth markets in Automotive and Internet of Things to drive future revenue streams. We have already seen this strategy flowing through the PnL and we are confident in the firm’s execution abilities going forward.
Competitive Advantage: Automotive Strength: Automotive revenue rose ~55% in FY 2024 to $2.9 billion, further supported by over 10 new design wins with global automakers for advanced driver-assistance systems (ADAS), connectivity, and digital cockpit solutions.
IoT Growth: IoT revenue reached $1.4 billion, reflecting steady traction in smart devices and industrial applications…” (Click here to read the full text)
Overall, QCOM ranks 5th on our list of best very cheap stocks to buy according to billionaires. While we acknowledge the potential of QCOM as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than QCOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
