Investing.com - Qualcomm (NASDAQ:QCOM) reports Q3 2017 earnings on Wednesday, July 19 after the US market closes. Consensus estimates say the company will report an EPS of $0.81 on $5.22 billion in Revenue.
Here are 5 reasons why Qualcomm can double its value in the near future.
First, At 56 dollars, Qualcomm's share price is artificially low because of Apple (NASDAQ:AAPL)'s lawsuit. Apple claims that Qualcomm is both selling chips and collecting royalties from licensing its technology. However, Qualcomm's proprietary knowledge and unique performance on offer would be hard for Apple to pass on.
Second, in October of last year, Qualcomm announced its intention to acquire the Dutch chip maker NXP Semiconductors. NXP is leading in markets in which Qualcomm has almost no presence—in particular the Internet of Things and the automotive industry. Together, the two companies could create a one-stop-shop for everything chip related.
Third, currently, Qualcomm controls about 40% of the mobile phone market, and dominates the high-end mobile chip segment. According to recent reports, Qualcomm's efforts to improve its mid-range chip offering are already paying off in China. Though MediaTek still leads that region, the trend is clear – Qualcomm is moving up in China.
Fourth, Qualcomm recently shipped a developer's kit so that developers could test its new VR device. It is also collaborating with Google (NASDAQ:GOOGL) and powering Google's VR offering, called 'Daydream'. Over the next four years, the VR hardware market is expected to grow five-fold. Qualcomm is already uniquely positioned to become the primary chip maker for everything VR.
Lastly, earlier this year, Qualcomm announced a partnership with Microsoft (NASDAQ:MSFT). The two are trying to create a chip to maximize efficiency in data centers. This collaboration enhances the chip maker's ability to create technology better suited to customer needs and gains Qualcomm an extremely strong entry point to the server market.
It may take a bit of time for the company to fully reach its potential and we don't expect immediate returns. However, we see Qualcomm's value doubling over the next two to three years. In the meantime, there's a nice 4% dividend reward for being a patient shareholder. We unequivocally like this deal.