Shares of semiconductor maker Qualcomm (QCOM) are higher by 30% over the past year, but more impressive is a 45.61% surge over the past month — a period including the company’s latest earnings update. But that also includes an 8% drop last week.
That may be one sign aggressive, risk-tolerant traders should examine the Direxion Daily QCOM Bear 1X ETF QMCD. QMCD is an inverse, though not leveraged, ETF, meaning it’s designed to deliver the daily inverse performance of Qualcomm stock. So if the shares fall by 5% on a particular day, the Direxion ETF should rise by the same amount. It may be one for traders to consider at a time when the stock appears overvalued, as Seeking Alpha noted.
“The San Diego, California-based semiconductor firm currently trades at 18.7x in terms of a forward P/E (non-GAAP) basis compared to its five-year average of 14.3x and the sector median of 24.2x,” according to Seeking Alpha data.
Valuation alone isn’t the only reason tactical traders may want to evaluate the bearish QMCD.
Why It’s Time to Query QMCD
As is the case with so many chip stocks, Qualcomm ran up due to artificial intelligence (AI). Interestingly, that may be part of the near-term case for QMCD, because some market observers believe there’s lack of AI clarity with this stock.
“It was up because the company announced that they had a new deal with a ‘leading hyperscaler customer, shipments beginning here later in 2026,” said Morningstar’s Dave Sekera. “However, they didn’t really provide any actual detail with who that customer is, what exactly they’re going to be supplying them with, or really try and give the marketplace any kind of way of really encapsulating—what’s the value here?”
Translation: Qualcomm may well be an AI “show me” story. Until it delivers those goods to investors, caution may be the way to play the stock. That, or consider the bearish QMCD — and there may be catalysts for the Direxion ETF.
“So this is one where I’m very concerned that you could see this one maybe gap down until you get more information,” added Sekera. “I think it was toward the end of June, maybe that’s when they have their investor day, but that’s, I think, when they’re talking about giving the marketplace more detail on what that deal actually is. But until then, I think this is probably going to be pretty volatile.”
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