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Qualcomm logo on smartphone beside circuit board and wireless signal graphic, highlighting QCOM chips.

At a Glance

  • Qualcomm has just exited extremely oversold territory, a technical setup that previously marked the start of a major recovery rally.
  • The signal is appearing just ahead of earnings, when expectations are about as low as they can be.
  • With much of the downside already priced in, the risk-reward balance is tilting toward the bulls.

 

Shares of tech giant Qualcomm Inc. (NASDAQ: QCOM) are trading around $155 after a rough couple of weeks. Having started the year reasonably well, the stock has fallen roughly 15% over the past fortnight. It hasn’t helped that the selling pressure has been pretty relentless, as fears mounted that Qualcomm may have missed the boat on the AI transformation, particularly in the major enterprise use cases.

That pessimism has been reflected clearly in the stock’s chart. Last week, Qualcomm’s relative strength index (RSI) dipped below 30, officially entering extremely oversold territory. That alone would be noteworthy, but its rapid bounce back above the crucial 30 level makes this setup particularly interesting. Not only because it suggests that the worst of the selling pressure may already have passed and that buyers are stepping back in, but because of what the stock did the last time this happened.


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Why Qualcomm’s RSI Signal Matters Right Now

A stock’s RSI is one of the more popular technical indicators that investors keep an eye on. It gives a quick snapshot of the stock’s recent momentum, and is an easy way to gauge how overbought or oversold it might be. Just as important as how far it falls is how quickly it bounces back, because this says a lot about how the market is viewing the situation. 

The last time Qualcomm’s RSI fell below was in April of last year, and in less than a week, it was already out of the danger zone. That’s literally the setup we’re looking at now, and it’s in that context that investors need to be thinking of what the stock could do from here. 

History Rhymes: Qualcomm’s RSI Bounce Previously Fueled a Rally

That quick bounce out of extremely oversold levels in April preceded the start of what became a 70% rally in Qualcomm shares. It marked a clear inflection point where bearish momentum gave way to sustained accumulation, and we could be about to see the same thing here. 

Once again, Qualcomm has been aggressively sold as sentiment turned negative, but the fact that RSI has already popped back above 30 suggests the market has absorbed the bulk of the selling. This reversal is unfolding just days ahead of earnings, which makes the setup right now all the more appealing if you buy into the argument that the sell-off has been overdone. 


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Even After the Downgrade, Qualcomm Still Shows Upside to $175

Much of its lackluster performance compared to its peers, both throughout last year and in recent weeks, can be tied to ongoing concerns that Qualcomm has been left behind in the AI arms race. While the likes of NVIDIA Corp (NASDAQ: NVDA) seem to have been soaking up market share since day one, Qualcomm’s progress has been quieter and more fragmented.

However, that view may be too narrow. Qualcomm has been making steady advances in personal AI, particularly across IoT, edge computing, and robotics. Those markets are less flashy than large-scale cloud AI, but they are meaningful, scalable, and well aligned with Qualcomm’s core strengths. In that context, the current sell-off suggests the market may be discounting those opportunities too heavily.

A recent downgrade from Mizuho to a Neutral rating hasn’t helped. However, with Qualcomm currently trading around $155, it is worth noting that its refreshed price target of $175 still implies substantial upside.

Earnings Could Be the Catalyst That Turns Qualcomm Higher

From a technical perspective, Qualcomm has also shown early signs of stabilization. The stock has just bounced off support around $154, a level that marked the point where bears ran out of steam in October. 

Taken together, there’s a clear sense that the pieces are all starting to line up. Qualcomm heads into earnings with sentiment at rock bottom, and a fresh technical signal that has historically preceded a big recovery rally. History doesn’t always repeat, but it can often rhyme, and Qualcomm’s downside is far more limited right now than it was just two weeks ago. 

If the company can simply reassure investors that its longer-term growth story remains intact next week, the post-earnings reaction could easily skew higher. After a punishing start to the year, this is the kind of setup where confidence, rather than panic, may prove the smarter play.

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