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Qualcomm to surge 25% on sales turnaround: Goldman

Steve Mollenkopf, CEO of Qualcomm, at the Mobile World Congress in Barcelona on Feb. 23, 2016.
Brad Quick | CNBC

Investors should buy Qualcomm shares because of improving sales growth due to new chipset product cycles, according to Goldman Sachs, which reiterated its buy rating and added the company to its conviction buy list.

"We see Qualcomm as a powerful mean reversion story over the next year," Goldman's Simona Jankowski wrote in a note to clients Thursday.

"We expect revenue growth to accelerate into FY17 as Qualcomm's share gains at Samsung and with Chinese OEMs overcome share loss in the iPhone (at higher ASPs) and its China royalty collections recover. ... With several strong new chipset product cycles Qualcomm has regained leadership at the high end. "

Qualcomm surpassed expectations with its fiscal third quarter earnings report on Wednesday.