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Is Another Qualcomm Stock Split Likely? Why Investors Needn't Worry About It

Apr. 04, 2022 1:22 PM ETQUALCOMM Incorporated (QCOM)AAPL, AMZN, SSNLF17 Comments


  • QUALCOMM has performed well operationally, and that has made its shares rise in recent years.
  • Shares are at a price where a stock split could make sense, e.g., due to making option usage easier. A potential stock split shouldn't be a reason to buy, however.
  • Instead, QCOM is a buy due to its strong outlook and inexpensive valuation. A potential stock split should be seen as a bonus on top of the strong underlying story.
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Article Thesis

Due to readers' interest in this question, we'll explore whether a stock split is a possibility for QUALCOMM Incorporated (NASDAQ:QCOM). Although stock splits do not change the value of the underlying company in

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Jonathan Weber profile picture
Jonathan Weber holds an engineering degree and has been active in the stock market and as a freelance analyst for many years. He is an active author on Seeking Alpha since 2014.    
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Jonathan is interested in income stocks and value stocks primarily but does also follow some growth stocks. 

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of QCOM, AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (17)

Splits are irrelevant. It's like saying to five dollar bills are worth more than a $10 bill. The only reason that makes any sense to me is that the very small retail investor can now afford to buy. This argument makes sense for GOOGL but not for QCOM.
@pauliel Investors do NOT want fractional shares... I'm sorry, but this is reality.. Yes, I agree GOOGL is crazy expensive for the average working man... It should have been split a long time ago.
@pauliel I posted similar remarks a while back on $MMM. Someone raised a point that I hadn't considered: "Agree in principle but splits do change the options trade. There is more options activity in stock less than $100 than say those with price more than $1000." It may not be particularly relevant in the case of $QCOM, but as an academic point it's worth mentioning for that particular cohort of stocks & traders.
i wouldn't mind a split might run the stock back up to 175 -180 area, sell 25%, and stick with the split price long term.
The issue with the stock is its momentum, they botched the last buy back at 171$ and the average joe will probably prefer betting on nvidia or amd hoping to make quick bucks as they are more volatiles and gap up more often. From a fundamental standpoint, with a double digit growth there is no reason to have a PE at half of Apple. This should already trade at 200$, even if I doubt EPS will be in the high 20s in 5 years. The PEG ratio is ridiculously low and makes it the best bargain in tech, yet before this settle above 200$ for a while I doubht a split will happen.
depends on what kind of market your expecting, some people think were entering a phase where tech will not do so good with high inflation and possible recession and value companys and commodities dividends and assets will do better. just a thought
@john boy the issue is tech means everyting and nothing ... high growth no FCF high SBC non essential tech (this include sofwares) are in deep trouble. But secular tailwind diversifying massive FCF, EPS rich profitable essential tech should do well. They can pass on costs as there is no other choice (few months ago it was all about capacity contraints), they're essential in the next secular shift in the business of high speed communication for a connected world. They increase their dividend and buy back all the SBC while keeping positive cash. It is priced like it was a 5G modem company banking on apple products. Even in data center where they do not have a strong focus they had the best computing power per watt usage, even if FB didn't choose to adopt their 2020 AI chip. In auto they didn't do the same mistake when buying Arriver for the software side of their offering. Until they are proven wrong and have a massive guidance accident, this is the best bargain best of both value and growth world, tech or not
i aggree why i own qcom but to mr market hopefully they will keep qcom in mind with the fang stocks
Marrk profile picture
Thanks for your article.

I tend to agree on the price at which companies are now splitting shares. Today, it is no longer unusual to see share prices of the better companies trading above $100 to $175 [e.g, JPM, GS, V, JNJ etc.] That was not the case even 5 years ago. AAPL announced its split when the shares traded at $400 per share. It traded up to $500 or so until the ex-date for the split. So, I don't think there is any real pressure for QCOM to split based on its share price today. Just my two cents on QCOM. As a parallel, I own COST and have been waiting for them to announce a split. But, they are really not shareholder friendly. They pay a tiny dividend and have not done a special dividend for a couple of years. Even with the special divvy, the yield that year was still very low. I would guess that the company will not even consider a split until the stock price gets up to around $700. And, the split will be on the cheap side like 3:2. ff
Jonathan Weber profile picture
@Fundflow thanks for sharing. All the best
QCOM has been an investment goldmine... split or not I am a happy camper.
Jonathan Weber profile picture
@Dr. LouX thanks for sharing. All the best
I have no idea why any stock anywhere under $300-400 even needs to be split.... It's like split mania this year.
Jonathan Weber profile picture
@ocbearclaw They have done so in the past so might be inclined to do it again, but we'll see. All the best
I don't see a split at this point when violtility has been crazy the last few months. They purchased a new company and I can see capital appreciation kicking in and the PPS heading north of $200. It will also depend if wall street beats them up for no reason. Long QCOM.
Jonathan Weber profile picture
@JoeMonte Thanks for sharing. All the best
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