Qualcomm (NASDAQ: QCOM) shares continue to rise on the day after the company earned a bullish upgrade from Barclays. An upgrade so soon to the company’s quarterly earnings report, which is scheduled on February 1, is a positive indication for a stock that has been on many investors’ radars in recent months.

The rating also implies that the QCOM stock bounce, which is currently up more than 8% for the week as of mid-morning trading on Jan. 24, is about more than a resurgence of the risk-on trade in technology stocks but does the rally have enough legs to make this a good time to buy?

What Did the Experts Say?

Qualcomm was upgraded from Equal Weight to Overweight by Barclays on January 23. An Overweight rating indicates that the analyst feels Qualcomm will outperform the market. The anticipation of growth once China reopens is one reason for the boost. Qualcomm is a semiconductor company that is highly reliant on the consumer market.

Furthermore, the brokerage raised its price estimate on QCOM stock to $150 from $120 previously. This puts Barclays’ (LON: BARC) prediction around 15% lower than the consensus estimate of most analysts. However, it still implies an almost 20% increase over the current stock price.

And Qualcomm was not the only chipmaker to benefit from Barclays’ upgrade. On the basis of predicted demand for its data center chips, the firm upgraded Advanced Micro Devices (NASDAQ: AMD) to Overweight.

The brokerage also kept its Overweight recommendation on NVIDIA (NASDAQ: NVDA), defying expectations for a bleak near-term outlook. One of the reasons for this is the anticipated increase among their artificial intelligence (AI) customers.

This month, each of these equities is up more than 20%, outperforming the entire sector, which is up more than 11%.

Is it Time to Invest in QCOM?

Despite the recent surge, Qualcomm appears to be the most undervalued semiconductor stock. QCOM stock is still down 22% over the last year. The stock is also far from its all-time high of more than $180 a share, which it reached just over a year ago.

The stock has a P/E ratio of roughly 11x earnings. This is less than the industry average of about 17x earnings. It’s also significantly lower than AMD’s (44x earnings) and NVDA’s (44x earnings) values (81x earnings).

Qualcomm also pays a consistent dividend. However, the yield of about 2.27% is not particularly noteworthy. The yearly dividend is $3 per share, and the payout has been increasing for the last 20 years.

The market remains unpredictable, and investors should approach with caution, as a wave of earnings reports from technology companies are due in the next two weeks.

That doesn’t imply you should consider selling. However, you should brace yourself for volatility. Earnings reports are backward-looking, despite providing some forward guidance. Analyst reports are estimates of future growth.

In a cyclical industry like semiconductors, the disparity between past and future performance might be significant. And public opinion can shift swiftly.

If you have a long position, now is the time to dollar-cost average it and hunt for opportunities to enter QCOM at the best price.

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