The AI stocks no one's talking about (but institutions are quietly buying) (From TradingTips)
At a Glance
- Qualcomm's first major downgrade of 2026 has triggered a sharp sell-off and renewed investor concerns.
- Technical signals have weakened, putting pressure on the stock's longer-term uptrend ahead of key earnings.
- With results approaching, investors face a pivotal moment as sentiment and price action diverge.
Shares of tech giantQualcomm Inc. (NASDAQ: QCOM) have stumbled into the new year on the back of a sudden shift in analyst tone. The stock fell nearly 5% to start the week and is now trading back under $170, a sharp reversal from the optimism that had been building late last year, when it looked poised to break through resistance around $184.
The catalyst was the first notable analyst update of the year. The team over at Mizuho downgraded its rating on Qualcomm from Outperform to Neutral, while also cutting its price target from $200 to $175. Now, on its own, that target still sits above where the stock trades today, suggesting the reaction has been overdone. But the reasoning behind the downgrade is what has unsettled investors. As we head into the rest of the year, investors need to ask themselves whether they should give up on Qualcomm or perhaps double down.
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Why Mizuho Is Growing More Cautious on Qualcomm
Justifying the downgrade, Mizuho's analyst Vijay Rakesh pointed to mounting headwinds in Qualcomm's core handset business, particularly as the company is set to lose modem share tied to Apple Inc. (NASDAQ: AAPL) devices in fiscal 2026 and 2027. Also in his note, Rakesh flagged a softer outlook for global smartphones, citing continued pressure across PCs and handsets, weakening demand in China, and rising competition from local suppliers.
While Mizuho acknowledged that Qualcomm's non-handset businesses, including automotive and IoT, are growing at strong double-digit rates, it does not believe that growth will fully offset near-term pressure from handsets and Apple-related losses. The message was clear—Qualcomm's diversification efforts are working, but not quickly enough to insulate the stock from a cyclical slowdown.
Qualcomm's Chart Is Flashing Early Warning Signs
The update has come at a time when Qualcomm's chart is particularly vulnerable. Its multi-month uptrend from April is still intact, but only just. The recent drop has pulled the stock back from key resistance near $184 and sent momentum indicators firmly into bearish territory.
The MACD, for example, has now printed a bearish crossover, confirming that near-term momentum has swung in favor of the bears, while the RSI is trending lower as well. While it is not yet at extremely oversold levels, it is moving in that direction, reflecting increasing selling pressure that could worsen before it improves.
That puts the spotlight squarely on support around $160. If Qualcomm fails to hold that level in the coming sessions, the technical damage would become far more serious. Bulls do not need an immediate rebound, but they do need stability. More negative updates like this would make that increasingly difficult.
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Why It May Be Too Early to Abandon Qualcomm
Still, despite the uncomfortable setup, this is not a clear-cut sell signal. Qualcomm is still up roughly 40% since April, and the longer-term trend has not been broken. One downgrade, albeit high-profile, does not define the full analyst landscape.
It is also worth noting that Mizuho's Neutral stance does not imply that Qualcomm needs to fall any further—in fact, with the stock currently trading well below its updated price target of $175, you could argue it's a buy right now.
As we've noted in recent weeks, the company's fundamentals also offer some support. Qualcomm has consistently beaten analyst expectations in its quarterly earnings reports, and its diversification into automotive and IoT is gaining traction. Those segments may not fully offset handset pressure today, but they do provide a path to a less cyclical revenue mix over time.
All Eyes on Earnings as Qualcomm Approaches a Fork in the Road
The real inflection point is now just ahead, with Qualcomm due to report earnings in the first week of February. How the stock trades into that event will be telling. If it can stabilize above $160 and avoid further negative analyst updates, confidence may begin to rebuild. A solid earnings report could quickly shift the narrative back toward long-term upside rather than near-term downside.
If support fails, however, the market's patience may wear thin. Qualcomm has a long history of frustrating investors at moments when optimism starts to creep back in, and that's why the next move from here could carry far more weight than the downgrade itself.
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