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Stocks of the Week!

In this email:

• The $7.7 Billion Elephant in the Room 🐘

• 32,481% Revenue Growth Ready to IPO 🚀 

• This Stock Is AI’s Backbone 💾

The $7.7 Billion Elephant in the Room 🐘

Break ups are always tough. Fortunately, mine have never cost me $7.7 Billion. Qualcomm might not be able to say the same.

Apple are getting ready to give them the “It’s not you, it’s me” chat. As one of their top-tier clients, they’re walking out the door with a whole bunch of cash. But is that enough to make Qualcomm investors panic? A better question. Is the drop from the news a reason to buy?

Call me crazy but I think the answer might be “yes!”

About that $7.7 Billion Elephant… 🐘

Apple relies on Qualcomm’s 5G modems to power its iPhones, but it's been working on an in house alternative for years. The transition could slice $7.7 billion off Qualcomm’s revenue by 2028. Not ideal.

But this isn’t breaking news. Apple haven’t been caught cheating out of the blue. Qualcomm already saw this coming. The new question is how do you replace a bombshell like Apple?

Qualcomm think it’s by diversifying into high growth markets like Automotive & IoT which is exactly what they’ve been doing to offset the Apple-shaped hole in its books.

Apple’s Breakup Timeline 🕰️💔

• 2019: Apple acquires Intel’s modem business for $1B. The first clue it wanted to cut Qualcomm loose.

• 2024: Qualcomm extends its contract with Apple to supply modems until March 2027.

• 2025: Apple starts phasing out Qualcomm modems, starting with the iPhone SE4 & some iPhone 17 models.

• 2027: Apple’s full transition away from Qualcomm modems is expected to be complete.

Betting Big on IoT & Automotive 🚗📶

Right now, Apple modems account for ~15% of Qualcomm’s revenue. Let’s take a look at the markets Qualcomm is moving into that I mentioned earlier.

• Automotive 🚘 → Expected to grow at 28.1% annually, fueled by self-driving cars & in-vehicle connectivity.

• IoT (Internet of Things) 📡 → Projected to grow 26.6% annually, covering smart devices, industrial automation & more.

Today these make up 22% of Qualcomm’s total revenue. By 2028, these two sectors will make up nearly 50% of total revenue.

Qualcomm’s Competitive Edge 🏆

I know so far I’ve been “Apple this” and “Apple that” but let’s take a second to appreciate what a beast Qualcomm is.

Even without Apple, Qualcomm dominates the 5G modem space, with a 55.7% market share. That’s almost double MediaTek (27.6%) & miles ahead of Samsung. And guess what? Samsung still uses Qualcomm modems in its premium Galaxy phones.

On top of that, Qualcomm’s Snapdragon X80 modem is still one of the best in the game, offering:
✅ 10 Gbps download speeds
✅ AI-powered latency reduction
✅ Industry-best carrier aggregation

Is QCOM a Buy? 📈💰

Even with the drama, Qualcomms upside is huge.

If you account for ~7.4% revenue growth per year (yes, that’s factoring in Apple’s exit) & compare them to their peers, you’re looking at 34% from current price. A target right around $230ish.

Comparative Valuation vs. Peers 📊

• QCOM trades at a lower multiple than its closest peers despite a stronger non-smartphone growth story.

• Broadcom is the closest comp but Qualcomm has a bigger upside in Automotive & IoT expansion.

• Nvidia’s premium multiple is due to its AI dominance. Qualcomm isn’t in the same league but is still undervalued by comparison.

Qualcomm was already great value before the sell off. Anything lower is just more bonus on the upside when we get there.

32,481% Revenue Growth Ready to IPO 🚀 

Today’s Fastest Growing Company Might Surprise You

🚨 No, it's not the publicly traded tech giant you might expect… Meet $MODE, the disruptor turning phones into potential income generators.

Mode saw 32,481% revenue growth, ranking them the #1 software company on Deloitte’s 2023 fastest-growing companies list.

📲 They’re pioneering "Privatized Universal Basic Income" powered by technology — not government, and their EarnPhone, has already helped consumers earn over $325M!

Their pre-IPO offering is live at just $0.26/share – don’t miss it.

Invest Now

*Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.
*The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.
*Please read the offering circular and related risks at invest.modemobile.com.

This Stock Is AI’s Backbone 💾

Micron have been dragging their feet. They barely scraped 8% in the last 12 months. The S&P is up nearly 20% in the same period.

BUT everyone’s sleeping on what’s coming next.

AI needs Micron & that’s a beautiful spot to be in. Let me explain.

AI = More Data = More Memory = $$$ for Micron💾

Micron isn’t just another semiconductor company. It’s one of the biggest players in DRAM & NAND storage.

What are those words? DRAM is like a computer’s short-term memory, handling real-time processing. NAND is its long-term storage, keeping data even when the power is off. All we really need to know is both are a must have for AI.

AI is going to be integrated into everyday life more & more. Guess what that means?

The need for high speed, high capacity memory chips will go insane. And that’s exactly where Micron thrives.

The King of AI, Nvidia’s CEO himself shouted out Micron’s HBM tech during CES for being twice as fast as the previous generation of tech.

Hyperscalers Are Going All-In on AI🔋

The five biggest hyperscalers (Amazon, Microsoft, Google, Meta, & Apple) are expected to throw $280B into AI infrastructure in 2025. That’d be a 27% jump YoY. We’ve already seen it happening with huge amounts of AI spend showing up on the earnings reports this year.

That’s not a small number. The best part? AI models are getting bigger & thirstier for memory. That means Micron’s wallet share in AI spending is only going up.

But… Why Has the Stock Been Stuck?📉

If in doubt, blame China. That seems to be the trend anyway.

DeepSeek, a Chinese AI research lab, dropped a cost efficient AI model that scared investors into thinking AI memory demand was about to fall off a cliff. This is where you need to learn to breathe & not follow the crowd. DeepSeek is actually a good thing for Micron.

How could that possibly be? Well, think about it.

If AI becomes cheaper & more accessible to people & businesses, more people will probably use it right?

And if more people are using AI then that means there’ll be more demand for Micron’s memory chips. The complete opposite of what everyone’s panicking about.

 Numbers Don’t Lie📊

Theories are great but the numbers always tell the real story. Micron’s numbers read like your favourite fairy tale with a happy ending.

• FY 2025 Operating Profit: $9B

• FY 2026 Operating Profit: $15B (+66% YoY)

• Stock Valuation: Trading at 6-7x FY26 EBIT. For context, Nvidia trades at 18-20x

Using consensus earnings forecasts, a fair valuation for Micron sits at $130 per share. That leaves a 41% upside from current price.

AI is just getting started, hyperscalers are doubling down & Micron’s got the golden ticket when it comes to AI memory demand. With huge operating profit growth & let’s call the valuation for what it is. A steal. This could be one of the best AI bets nobody’s talking about yet.

Some die hard fans Micron will see $250 which’d be 170% upside. I’m all for it but let’s reach $130 first 😅 

That’s all! See you same time next week 👋 

P.S Hit reply & let me know what you thought of this weeks newsletter. All feedback is welcomed ❤️