Qualcomm Reports Q1 Beat, Provides Guidance

Kevin Cassidy of Rosenblatt Securities has recently set a bullish price target of $200 for Qualcomm (QCOM), suggesting a potential upside of about 12.7% from its current price of $177.47. This optimistic outlook, published on May 2, 2024, underscores Qualcomm's strong position in the market, especially when considering the broader context of its financial performance and strategic moves in the technology sector. A detailed analysis by Benzinga further supports this view, emphasizing Qualcomm's solid performance and positive guidance amidst a challenging environment for the smartphone industry.

Qualcomm's recent earnings announcement has evidently bolstered investor confidence, leading to a 4% increase in its stock price in premarket trading. This surge is largely attributed to the company's successful penetration of the Chinese smartphone market with AI-driven demand. Qualcomm reported a remarkable 40% increase in sales to Chinese smartphone manufacturers in the first half of its fiscal year, driven by a shift towards higher-priced devices equipped with AI capabilities. This trend not only highlights Qualcomm's recovery after a two-year downturn but also its strategic positioning to capitalize on the growing demand for advanced technology in smartphones.

The broader implications of Qualcomm's success are significant, especially when contrasted with the performance of other companies in the tech sector. For instance, Fastly Inc (NYSE: FSLY) experienced a dramatic 34.3% drop in its stock price following mixed first-quarter results, marking a stark divergence in the fortunes of the two companies. While Fastly adjusted its full-year revenue forecast downwards, Qualcomm's outlook remains robust, buoyed by its strong performance and positive third-quarter sales projections that exceed estimates. This contrast not only underscores Qualcomm's resilience but also its ability to navigate market challenges more effectively than some of its peers.

Moreover, Qualcomm's growth is not confined to the smartphone segment. The company is also making significant strides in the Internet of Things (IoT) and automotive sectors, areas that are expected to contribute to its financial growth. With projections to add more than $8 billion in revenue, Qualcomm's diversified business model positions it well to leverage opportunities across various technology sectors. This expansion is particularly noteworthy given the increasing adoption of Qualcomm's high-end chips by Chinese vendors, a move that signifies a shift in market preferences and positions Qualcomm as a key player in the high-stakes tech industry.

The stock's performance, closing at $178.79 with an 8.95% rise, reaching its highest point for the year at $181.68, further validates Qualcomm's strong market position. With a market capitalization of approximately $199.53 billion and a trading volume of 19,124,414 shares on the NASDAQ exchange, Qualcomm's financial metrics reflect its solid foundation and promising outlook. This performance, coupled with strategic growth in key technology sectors, suggests that Qualcomm is well-equipped to sustain its momentum and continue delivering value to its shareholders.

Qualcomm (NASDAQ:QCOM) fiscal second-quarter results, released on Wednesday, exceeded Wall Street estimates, driven by improved chip sales as smartphone demand continued to recover. Following this news, Qualcomm saw an 8% rise intra-day today.

The company reported adjusted earnings per share (EPS) of $2.44 on revenue of $9.39 billion, surpassing the expected $2.32 EPS and $9.34 billion in revenue. The stronger-than-expected results were attributed to a 1% increase in handset chip sales, reaching $6.18 billion in Q2 compared to the previous year.

For the third quarter, Qualcomm expects adjusted EPS between $2.15 and $2.35, with revenue ranging from $8.8 billion to $9.6 billion. These projections compare to the analysts' estimates of an adjusted EPS of $2.18 and revenue of $9.04 billion.

Qualcomm (NASDAQ:QCOM) unveiled its fiscal first-quarter earnings, surpassing Wall Street's expectations amid a resurgence in smartphone demand that propelled sales of handset chips. However, concerns about potential weaknesses in its crucial Chinese market led to investor caution. Shares fell nearly 2% pre-market today.

The company achieved adjusted earnings per share (EPS) of $2.75 and revenue of $9.92 billion, outperforming analyst forecasts of $2.37 EPS and $9.49 billion in revenue.

A significant factor contributing to Qualcomm's financial success was a notable 16% increase in handset chip sales compared to the same period last year, totaling $6.69 billion. This comes after a 27% year-on-year decline in handset revenue in the preceding quarter.

Sales of automotive chips for the quarter ending December 24 also saw a substantial rise, increasing by nearly a third to $598 million. However, Qualcomm's Internet-of-Things (IoT) unit experienced a 32% drop in revenue, bringing it down to $1.14 billion.

For the current quarter ending in March, Qualcomm anticipates adjusted EPS to be between $2.20 and $2.40, with projected revenue ranging from $8.9 billion to $9.7 billion. These figures surpass Wall Street's previous profit and revenue expectations of $2.25 EPS and $9.28 billion.

Citi analysts raised their rating for Qualcomm (NASDAQ:QCOM) from Neutral to Buy, increasing the price target significantly from $110.00 to $160.00.

The analysts noted that the restocking activity in the handset market is expected to positively impact Qualcomm's revenue and margins. They anticipate this trend of inventory replenishment to persist at least until the first quarter of 2024. Additionally, the analysts project that Qualcomm will likely expand its market share with Samsung during this period.

Qualcomm Technologies (NASDAQ:QCOM) announced a significant agreement with Apple (NASDAQ:AAPL) to supply high-end chips for Apple's smartphones. This partnership will cover product launches in 2024, 2025, and 2026, resulting in a 3% surge in Qualcomm's stock intra-day today.

Qualcomm emphasized that this deal underscores its continued leadership in 5G technologies and products. Apple will incorporate Qualcomm's 5G Modem-RF Systems in its upcoming devices, with terms similar to their previous agreement.

Additionally, Qualcomm highlighted its 20% share of chipset supply for the smartphone launch in 2026. It's worth noting that their six-year global patent license agreement, established in 2019, remains unchanged, with an option for a two-year extension.

Wolfe Research analysts started coverage on Qualcomm (NASDAQ:QCOM) with an Outperform rating and a price target of $145.00 ahead of the company’s upcoming Q3/23 earnings announcement, scheduled on July 26.

The analysts stated that they believe the smartphone market is approaching a low point in its cycle following a period of over a year dedicated to correcting inventory. They also note that the downturn has been longer than anticipated due to what they perceive as Android losing market share to the iPhone in a structural manner. According to the analyst, Qualcomm is currently shipping fewer units than what customers are consuming, which could lead to positive mean reversion once the inventory normalizes.

The analysts highlighted that a challenge for Qualcomm in 2024 is the loss of iPhone modem revenue. However, since this loss is already factored into the company's guidance, it could potentially be a source of upside if Apple fails to qualify their modem again. In the long run, Qualcomm possesses options that are not available to other smartphone participants, such as secure design wins in the automotive industry and the potential for expansion into the PC market.