After declining 32% in 2015, shares of Qualcomm (QCOM)—a holding in the Investments Portfolio—during the turbulent first two weeks of this year have fallen just over 8%. At these reduced valuation levels, the chip maker offers a lower-risk way to play growth in three key emerging segments of the technology sector: the Internet of Things (IoT), connected cars and drones. An added bonus: the stock sports an attractive yield of 4.1%.

On the fiscal 2016 (ending September) consensus EPS estimate of $4.19, Qualcomm shares, recently trading at $45.82, have a forward P/E of 10.9, down from 12.2 in the middle of last year. While earnings in the current fiscal year are expected to fall 10%, analysts on average look for earnings in fiscal 2017 to rebound 17%. The forward P/E drops to 9.3 on the fiscal 2017 consensus EPS estimate of $4.91.

Credit Suisse believes Qualcomm’s current valuation is compelling. The firm generates a price target of $73 based on sum-of-the-parts analysis. In addition to $13 a share in net cash on the balance sheet, Credit Suisse values the Qualcomm CDMA Technologies (QCT) unit at $24 a share using a multiple that’s in line with the peer group. The Qualcomm Technology Licensing (QTL) unit, which owns and collects royalties for the vast majority of the company’s patent portfolio, is valued at $36 a share based on a conservative discounted cash flow, according to Credit Suisse. It should be noted that Qualcomm’s fiscal 2016 earnings could benefit by at least 30 cents a share from increased royalty compliance across China.

In it most basic form, IoT is a a series of connected devices that interact with each other. IoT use cases range from wearables and smart metering to industrial automation and asset tracking. Qualcomm’s products help power IoT networks, as its mobile and networking solutions are embedded in billions of devices worldwide.

The smart home is the first place many consumers will really see IoT in action. Qualcomm’s chips sit inside smart gateways, which connect a series of devices, systems and apps covering entertainment, heating, lighting and security. The smart gateway is a digital conduit designed to improve the connected experience in the home. For example, the gateway supports Qualcomm’s StreamBoost technology, which manages network bandwidth being utilized by a variety of devices operating on a home network, creating the highest number of optimal online experiences.

The company’s recently released MDM 9207-1 LTE modem is designed for IoT applications that require extremely reliable and power-efficient connections to cloud services. The platform includes power-saving features for devices that are constantly connected as well as for those that require infrequent connections to the network.

Also new, the MDM9206 LTE modem enables device manufacturers to power low data rate IoT applications such as battery powered sensors in a cost-efficient manner. For IoT use cases that require high data rates, Qualcomm’s recently announced Snapdragon X5 LTE modem supports download speeds of up to 150 Mbps.

On the connected car front, Qualcomm has been embedding its in-vehicle technologies with top automakers for more than 10 years. There are greater than 20 million vehicles deployed worldwide with the company’s Snapdragon LTE modems. Qualcomm is already involved in more than 100 automotive programs with major manufacturers, offering solutions in the areas of telematics, high-definition graphics/multimedia for infotainment systems, electric vehicle charging, machine intelligence for advanced driver assistance systems (ADAS) and vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communications for improved safety.

In August, Qualcomm completed its $2.4-billion acquisition of CSR, a fabless semiconductor maker offering solutions for IoT and connected car applications. The purchase added various assets—covering Bluetooth, WiFi, audio and global navigation satellite system (GNSS) technologies—to Qualcomm’s automotive-focused portfolio of products.

Qualcomm’s Snapdragon 820A processor is the company’s newest automotive-grade system-on-chip (SoC), offering a scalable infotainment, graphics and multimedia platform with integrated LTE-Advanced connectivity and machine intelligence. The 820A’s modular approach enables a vehicle’s infotainment system to be upgradable via both hardware and software updates.

Sensor integration in the 820A provides cognitive awareness and vehicle self-diagnostics, supports ADAS features for improved vehicle safety systems and provides location and navigation through GNSS technologies. By integrating advanced camera and sensor processing, the 820A supports critical always-on warnings and supports parking assist periphery vision features using surround view cameras.

Upside potential from the 820A was mentioned as part of Susquehanna’s recent upgrade of Qualcomm to ‘Positive’ with a price target of $60. The firm believes the 820A product cycle represents a significant improvement for Qualcomm’s chipset business, with numerous customer product launches set for the first half of 2016.

The company’s Atlas infotainment SoC is a prepackaged and cost-effective display audio solution for mid-to-standard tiers, while the VIVE 802.11ac chip set delivers safety applications for V2V and V2I use cases. Audi earlier this month selected Qualcomm’s Snapdragon 602A processors for its 2017 vehicles. The car maker will use the 602A to deliver advanced smartphone-quality connectivity, infotainment, navigation and control features.

Qualcomm’s Halo technology offers a convenient way to charge electric vehicles without having to plug anything in. Halo uses resonant magnetic induction to wirelessly transfer energy from a ground-based pad to a pad integrated in the vehicle. The technology, similar to that used to charge an electric toothbrush, delivers high energy transfer over a wide air gap, making it possible to charge SUVs with high ground clearance. In the future, Halo embedded in roadways will enable vehicles to be charged while they’re on the go.

In the drone segment, Qualcomm’s Snapdragon Flight platform was used by Tencent and Zerotech to co-design a commercial drone called Ying. Flight is highly optimized specifically for consumer drones and robotics applications. The platform is based on the Snapdragon 801 processor, with GPS, 4K video capture and robust connectivity. Ying is a small, lightweight drone, controlled from a smartphone, that uses Snapdragon 4K capture technology to sample the video image, providing a stabilized, corrected video recording at 1080p that can be directly streamed or uploaded to drone social community platforms.

Western Digital remains a ‘buy’ in the STI Investments Portfolio for risk tolerant investors.