To The Moon

$Qualcomm(QCOM)$ is scheduled to report its fiscal Q2 2025 financial results (for the quarter ending March 2025) tomorrow, Wednesday, 30 April 2025, after the market close. They will also host a conference call at 1:45 PM Pacific Time.

Earnings Per Share (EPS): Consensus estimates are generally around $2.81 to $2.82 per share. This would represent a significant year-over-year increase of about 15.6% compared to the $1.93 reported in Q2 2024.

Note: Some sources, like Nasdaq citing Zacks Investment Research based on 7 analysts, report a lower consensus EPS of $2.27. From Tipranks, the consensus estimate for EPS is expected at $2.82.

Revenue: Analysts expect revenue to be around $10.6 billion to $10.65 billion, indicating roughly 13% growth compared to the same quarter last year.

Qualcomm (QCOM) Last Positive Earnings Call Saw Share Price Decline By 15.61%

Qualcomm had a positive earnings call on 05 Feb 2025 which saw its share price decline by 15.61% since.

The earnings call showcased strong financial performance with record revenues and earnings per share. Significant growth was noted in the automotive and IoT sectors, alongside strategic advancements in PC and XR markets. Despite some seasonal declines and unresolved licensing agreements, Qualcomm's positive momentum in key areas and strong partnerships suggest a favorable outlook.

Qualcomm (QCOM) Guidance

During the Qualcomm First Quarter Fiscal 2025 Earnings Conference Call, the company reported record revenues of $11.7 billion and non-GAAP earnings per share of $3.41. The chipset business, QCT, achieved record revenues of $10.1 billion, with handset revenues reaching $7.6 billion, showing a 13% year-over-year growth. The automotive segment grew by 61% year-over-year, while IoT revenues increased by 36%. The guidance for the second fiscal quarter projects non-GAAP revenues between $10.2 billion and $11 billion, with non-GAAP EPS forecasted at $2.70 to $2.90.

Qualcomm highlighted its strategic partnerships and expanding product portfolio, particularly in AI and Snapdragon platforms, expecting significant contributions from non-handset revenues, targeting $22 billion by 2029. Additionally, the company noted strong design traction in PCs and substantial growth in the premium tier smartphone market.

Key Factors Influencing Qualcomm’s Fiscal Q2 2025 Performance

Qualcomm delivered record revenues of $11.7 billion and non-GAAP earnings per share of $3.41, both above the high end of guidance.

Smartphone Market Dynamics

Demand Recovery: Qualcomm’s revenue is heavily tied to smartphone sales (Snapdragon processors, 5G modems). A rebound in global smartphone demand, especially in emerging markets like India and Southeast Asia, could boost earnings.

Premium vs. Mid-Tier Devices: Growth in premium 5G phones (e.g., flagship Android devices) and adoption of AI-powered chips may drive higher-margin sales.

Diversification Beyond Smartphones

IoT and Automotive: Progress in Qualcomm’s automotive segment (Snapdragon Digital Chassis, partnerships with automakers) and IoT (industrial, edge computing) could offset smartphone cyclicality.

Automotive revenues grew 61% year-over-year, and IoT revenues increased 36% year-over-year.

AI and Edge Computing: Adoption of Qualcomm’s AI-optimized chips for PCs, XR (augmented/virtual reality), and cloud infrastructure may open new revenue streams.

Over 80 Snapdragon X series PC designs in production, targeting over 100 designs by 2026, with a 10% share in the US retail market for Windows laptops over $800.

Supply Chain and Geopolitics

Chip Manufacturing: Resolved supply chain bottlenecks (e.g., TSMC capacity) or new geopolitical tensions (U.S.-China tech restrictions) could impact production costs and timelines.

QCT achieved record revenues of $10.1 billion, with record quarterly handset and automotive revenues. Handset revenues grew 13% year-over-year.

Inventory Levels: Excess inventory corrections in the semiconductor industry (post-2023 slump) could stabilize by 2025, improving pricing power.

Competitive Pressures

Rivals: MediaTek, Samsung, and Apple (in-house silicon) threaten Qualcomm’s smartphone dominance.

Continued collaborations with Samsung, Google, Microsoft, Lenovo, and Meta, enhancing AI and XR capabilities across devices.

AI Chip Competition: Nvidia, AMD, and custom silicon from cloud providers (AWS, Google) challenge Qualcomm’s edge in AI/ML hardware.

Licensing Revenue

Patent Portfolio: Qualcomm’s high-margin licensing business (3G/4G/5G patents) faces risks from legal disputes (e.g., ongoing EU/China antitrust scrutiny) or renegotiated royalty rates.

Extended key agreements with major OEMs and anticipated new long-term licenses, reaffirming Qualcomm's strong licensing program.

Discussions with Huawei are ongoing, with no renewal included in current financial guidance.

Macro Environment

Consumer Spending: Inflation or recessionary pressures could reduce demand for consumer electronics.

Sequential decline in QCT handset revenues expected for the second fiscal quarter, driven by seasonality and shipments to Apple.

Currency Headwinds: A strong U.S. dollar may hurt international revenue conversions.

Qualcomm (QCOM) Price Target

Based on 31 analysts from Tiger Brokers offering 12 month price targets for Qualcomm in the last 3 months. The average price target is $191.90 with a high forecast of $270.00 and a low forecast of $145.00. The average price target represents a 30.00% change from the last price of $148.56.

Technical Analysis - Exponential Moving Average (EMA)

We are seeing momentum build up from RSI for QCOM, this mean that investors are looking for an earnings which could reflect expected growth is likely driven by higher demand for Qualcomm's chipsets, particularly from premium Android smartphone manufacturers in China. Strength in the Automotive and IoT (Internet of Things) segments is also anticipated.

The overall analyst sentiment appears positive, with ratings generally ranging from "Moderate Buy" to "Strong Buy" and a Zacks Rank of #2 (Buy).

These factors might help QCOM to push for a bullish trend post earnings, strong 5G adoption in emerging markets, successful automotive/IoT growth, and AI chip demand drive double-digit revenue growth. Licensing disputes resolve favorably, stabilizing high-margin royalty income. Supply chain normalization reduces costs.

Whereas sluggish smartphone sales, market share losses to MediaTek/Apple, and inventory glut pressure margins might push QCOM into a bearish trend together with geopolitical tensions disrupt supply chains or limit access to key markets (e.g., China) and regulatory challenges slash licensing revenue.

Summary

Qualcomm is pivoting toward higher-growth areas (automotive, IoT, AI) to reduce smartphone dependence. By 2025, its success in these segments—combined with 5G/6G innovation—could determine earnings sustainability. However, cyclical semiconductor downturns and competition remain risks.

I think as investors, we should monitor Qualcomm’s progress in non-smartphone segments, inventory trends, and royalty revenue stability.

Appreciate if you could share your thoughts in the comment section whether you think QCOM could show that they have gotten results from pivoting to higher-growth areas.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.