Qualcomm Inc. (NASDAQ: QCOM) suffered one of its worst sessions of 2025 last Friday, tumbling more than 7% to close at the lows of the day. The sell-off hit the entire semiconductor sector as concerns about a fresh trade spat with China and a fragile-looking AI bubble sent investors fleeing. However, Qualcomm’s decline stood out. The company’s recent rally, which had at one point been outpacing that of NVIDIA (NASDAQ: NVDA), suddenly looked a lot weaker.
The good news for investors is that since the start of this week, shares have rebounded around 5%, climbing back above $160. The quick recovery is encouraging, but the episode was a reminder of how fragile confidence still is. For a stock that has struggled for years to hold investor trust, while still trading at 2021 levels, the road to lasting gains in Q4 just got steeper. Let’s jump in and take a closer look at why that is.
Friday’s Sell-Off Exposed Lingering Doubts
Perhaps the most worrying aspect of the drop was that there was no single catalyst behind it. Instead, it was a mix of stretched sentiment, sector-wide weakness, and renewed headline risk. Qualcomm had rallied around 40% since April on optimism around its steps towards diversification, but there was a sense that it was always going to be vulnerable if, or when, the market turned risk-off on tech stocks. Fresh reports of an antitrust probe in China and ongoing patent disputes only added to the anxiety.
Together, these factors reignited a long-standing concern: that Qualcomm is still viewed as a cyclical chipmaker, rather than a pure AI winner like NVIDIA or Advanced Micro Devices Inc. (NASDAQ: AMD). When sentiment is good, it lags these peers, and when it fades altogether, it also gets hit harder. Friday’s sell-off showed that the market’s conviction in Qualcomm’s prospects remains thin, and that traders won’t be slow to lock in profits going forward.
The Quick Rebound Points to Support
That being said, there have been signs that the damage last week might be limited. Qualcomm’s two-day rebound this week has already recaptured most of Friday’s losses, suggesting buyers are happy to get involved around the $155–$160 level. That price zone has been a key level of support since the summer and appears to be holding again.
The technical picture is also healthier than the headlines might suggest. The stock’s Relative Strength Index has cooled from overbought levels in September to a more neutral reading near 50, though the MACD indicator has also entered a bearish setup at the same time.
Ideally, this recent reset will simply be a healthy pause within Qualcomm’s broader rally, but it can’t afford many more red days like last week.
Q4 Will Be Defined by Earnings
The next major test arrives in early November, when the company reports its results. Qualcomm has managed to build a solid track record of beating analyst expectations, which has helped to outweigh negative sentiment in the past. Another strong report would go a long way toward restoring momentum.
Investors will be watching three areas closely: first, whether growth in AI-enabled devices, automotive systems, and IoT can offset slower smartphone demand. Second, updates on the recent acquisition of Arduino, which strengthens its position in robotics and embedded hardware. And third, any reassurance about China’s regulatory scrutiny, which has become a recurring source of uncertainty.
Analysts expect modest revenue growth and stable margins, but with sentiment fragile, Qualcomm will need clear evidence of durable progress. The earnings report could determine whether the rebound extends into year-end or stalls below resistance.
Valuation Still Offers a Safety Net
At roughly 16x earnings, Qualcomm trades at a significant discount to its larger peers, such as NVIDIA and AMD. That gives investors, at least on paper, a measure of downside protection if volatility persists. The company’s balance sheet is strong, and its cash flows are steady, which, along with its 2.2% dividend yield, make it appealing in a market that’s becoming increasingly worried about a bubble.
But Friday’s plunge was a reminder that a cheap stock isn’t immune to panic. If anything, it confirmed that when macro fear spreads, Qualcomm remains an easy target. To shift that perception, management must show that its diversification efforts are gaining traction and that it can run with the big boys.
Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
The article "Qualcomm: What Last Friday’s Drop Says About Its Q4 Prospects" first appeared on MarketBeat.
