Sound Shore Fund, Inc. on Qualcomm Incorporated
Thesis
Qualcomm is a leading semiconductor supplier that is rapidly diversifying beyond its traditional markets. Sound Shore believes its developer tools are accelerating edge-AI functionality in new markets and driving incremental demand for Qualcomm chips. The fund sees strategic flexibility to capture a large AI opportunity while valuing the shares at an attractive roughly 10 times earnings power once the newer businesses mature.
“We believe Qualcomm possesses the strategic flexibility required to capture the immense AI opportunity ahead.”
Key risks
- The current AI and semiconductor cycle may prove shorter than expected
- The thesis depends on successful diversification into new markets