Cerity Partners shares of Qualcomm Inc will rise about 25 per cent in the next six months as the market begins to realize that the semiconductor design giant's business is becoming more diversified, Jim Lebenthal, chief equity analyst at Cerity Partners, a prominent Wall Street investment firm, predicted in an interview on Monday, Zitong Financial APP learned.

Jim Lebenthal said in an interview with the media that if Qualcomm Inc got a price-to-earnings ratio valuation that matched its fundamentals, then the stock would be trading at around $2100.The current price is obviously undervalued. The stock hit a 52-week high of $191.30 yesterday, but closed down 0.3 per cent at $183.320.

Lebenthal added that he expects Qualcomm Inc's share price to reach $230 in about six months, during which time analysts at big Wall Street banks will begin to reevaluate the stock based on their fiscal year 2023 forecasts.

"the market thinks that Qualcomm Inc is just a smartphone chip design company, and the general view is that its fate is closely linked to Apple Inc (AAPL.US)," he said. In my opinion, this view is a drag on Qualcomm Inc's share price. " Qualcomm Inc is rapidly diversifying his business, and the smartphone chip business is only part of it. "

Lebenthal pointed out that Qualcomm Inc will benefit from the Internet of everything and the increased penetration of electric vehicles, with a large portion of the company's revenue coming from products for the automotive industry and the Internet of things market.

The analyst expects these businesses to eventually account for about 30 per cent of Qualcomm Inc's total revenue within three years. Lebenthal stressed that currently, automotive and Internet of things business lines contribute about 22% of revenue.

Based on these fast-growing businesses, analyst Lebenthal believes that Qualcomm Inc's valuation should be around 20x, rather than the current 17x, and strong performance growth expectations will help further boost his valuation.

For most of 2021, Qualcomm Inc lagged far behind the broader U. S. stock market. Although the sharp rebound that began in early November significantly narrowed the gap between the stock and the market, the stock still lagged behind the market this year.

Qualcomm Inc's share price has risen about 21% since the end of 2020, while the s & p 500 is up 27%.