That slide has created an unusual opportunity: the company now offers a forward dividend yield of 2.5%, with the potential for upside as it pivots toward data center growth.
Each quarter, Qualcomm pays $0.92 per share. That translates to $3.68 annually, a yield that remains sustainable. Free cash flow coverage of the payout is at 36% over the past year, and earnings cover it at 41%. That leaves ample room to fund new ventures.
The company is targeting $40 billion in non-handset revenue by fiscal 2029. Data centers form a key part of that plan, with revenue expected to hit $5 billion in 2027 and grow to $15 billion by 2029. Qualcomm is aiming to shift a third of revenue away from phones, leveraging its experience in chip design for AI infrastructure and other high-growth segments.
Demand is rising in automotive and Internet of Things markets, too. Management says the company is well-positioned to grow margins as it expands into these areas. The dividend, meanwhile, is expected to rise at a low- to mid-single-digit pace, driven by the return of free cash flow to shareholders.
The high yield suggests investors may be overlooking Qualcomm's long-term potential. With a clear roadmap and strong financials, the stock is drawing interest from those hunting for income in a high-interest rate environment.