Shares of Qualcomm (QCOM) rose more than 4 percent in extended trading on Wednesday after the mobile chip giant reported strong results and a better-than-expected forecast for the current quarter, citing rising demand for AI-enabled devices.
The company expects June quarter sales to be in the range of $8.8 billion to $9.6 billion, with the average estimate of $9.05 billion being $9.2 billion. He expects earnings per share (EPS) to be between $2.15 and $2.35, compared to Wall Street’s estimate of $2.17 per share.
For the fiscal second quarter ended March 24, the San Diego, California-based corporation reported adjusted earnings of $2.44 per share, beating analyst estimates of $2.32. Revenue of $9.39 billion rose 1% from the same quarter last year, beating Street forecasts of $9.34 billion.
Strong demand from China
While the company expects mobile revenue to decline in the current quarter due to fewer smartphone launches during the summer months, it is optimistic about strong demand for “premium tier” devices with more powerful CPUs. According to the report, the profit of Chinese phone manufacturers has increased by 40% compared to last year.
“We see no signs of weakness in China’s premium Android market,” Qualcomm CEO Cristiano Amon said. “There is really a lot of power coming from premium devices like Oppo, OnePlus and Vivo,” he added.
Amon also said during the earnings call that next-generation smartphones with AI and generative AI are driving demand for premium devices. “We are seeing the first examples of AI launching on devices and Gen AI on premium devices and being adopted by consumers.”
Keep costs in mind when purchasing based on benefits
Qualcomm stock has been on a steady rise since the 50-day moving average broke above the 200-day moving average in early December last year, signaling a bullish golden cross. Last week’s drop below the 50-day moving average led to increased buying activity, indicating the stock’s underlying strength ahead of the company’s quarterly report.
If Qualcomm’s stock continues to rise following its better-than-expected earnings report, investors should keep an eye on two consecutive gains to reach $176 in March and April. A close above this level could trigger a break above the multi-month uptrend line that ran through the end of October.
Qualcomm shares rose 4.1% to $170.77 in after-hours trading. Through the close of trading Wednesday, the stock had gained about 41% over the past 12 months.
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Conclusion
Qualcomm’s share price has increased as a result of the company’s strong performance and better-than-expected prospects due to increased demand for AI-enabled devices. Qualcomm’s expertise in AI technology, coupled with its unique solutions, positions the company well to maintain its growth momentum and remain a leader in the semiconductor and software industry.
Questions to ask
Q. What caused Qualcomm’s stock price to rise after reporting good results?
A. Qualcomm shares rose more than 4% in extended trading after it reported strong results and a better-than-expected outlook for the current quarter.
Q. What are Qualcomm’s expected revenues for the June quarter?
A. The company expects sales in the June quarter to be between $8.8 billion and $9.6 billion, compared with the median estimate of $9.05 billion or $9.2 billion.
Q. What are Qualcomm’s expected earnings per share (EPS) for the June quarter?
A. The company expects EPS to be between $2.15 and $2.35, compared to Wall Street estimates of $2.17 per share.
Q. What is the reason for Qualcomm’s good performance?
A. Strong demand for AI-enabled devices, particularly “premium tier” devices with more powerful CPUs, fueled Qualcomm’s strong performance.
Q. How much did Chinese phone makers’ profits increase?
A. According to Qualcomm CEO Cristiano Amon, the Chinese phone maker’s profits have increased by 40 percent compared to last year.
Further
- Qualcomm’s expertise in artificial intelligence technology and unique solutions position the company well to maintain its growth momentum and remain a leader in the semiconductor and software industry.
- The company’s strong results and better-than-expected prospects have boosted investor confidence, causing its share price to rise.
- Qualcomm’s ability to adapt to changing market trends and demands, such as the shift toward AI-powered devices, has contributed to its success.
- The company’s strong ties with Chinese phone makers such as Oppo, OnePlus and Vivo have also fueled its growth.
Important personalities
- Qualcomm’s share price has risen almost 41% in the last 12 months.
- The company’s revenue for the fiscal second quarter ended March 24 was $9.39 billion, up 1% from the same quarter last year.
- Qualcomm’s adjusted earnings per share for the fiscal second quarter were $2.44, beating analyst estimates of $2.32.