Qualcomm's Q3 Earnings Beat Estimates, Driven by AI and Diversification Efforts

Qualcomm forecasts revenue above estimates, betting on AI use to drive chip demand

July 30 (Reuters) - Qualcomm (QCOM.O), opens new tab projected current-quarter sales above Wall Street expectations on Wednesday, wagering that growing AI capabilities in consumer devices will boost demand for its semiconductors despite ongoing global trade uncertainties. The San Diego-based company is the world's largest supplier of modem chips that enable smartphones to connect to wireless data networks. It forecast revenue between $10.3 billion and $11.1 billion for the September quarter, compared with estimates of $10.64 billion, according to data compiled by LSEG. Qualcomm has not seen signs of customers ordering chips ahead of normal seasonals schedules to try to get ahead of possible tariffs, Chief Financial Officer Akash Palkhiwala told Reuters in an interview. U.S. President Donald Trump's tariff policies have so far provided exemptions for smartphones and semiconductor chips from these levies. But Trump has issued warnings about potential sector-specific tariffs targeting the industry, stating as recently as this month that he would "soon announce tariffs on semiconductors." The tariff situation remains highly fluid and complex, with existing Chinese electronics tariffs still in effect despite the exemptions granted for certain categories. Global smartphone shipments climbed 1% in the second quarter, according to research firm IDC, as Apple, a key Qualcomm customer, accelerated shipments to avoid potential tariff impacts. Still, the company said its chip segment revenue from customers excluding Apple were up more than 15% so far this fiscal year. Qualcomm CEO Cristiano Amon said he expects to the company's business in supplying chips to augmented-reality glasses such as Meta Ray-Bans to expand. "We have all the designs that matter right now - the number of designs like the Meta glasses is now up to 19, and that continues to accelerate," Amon told Reuters in an interview. Qualcomm forecast fiscal fourth-quarter sales chip segment sales at a midpoint of $9.3 billion, compared with analyst estimates of $9.19 billion, according to Visible Alpha data. The chipmaker reported sales of $10.37 billion for its third quarter ended June 29, beating estimates of $10.35 billion. The company's third-quarter adjusted profit of $2.77 per share compared with estimates of profit of $2.71 per share. It expects adjusted profits in the fiscal fourth quarter of about $2.85 per share, above estimates of $2.83 per share. Reporting by Akash Sriram in Bengaluru and Stephen Nellis in San Francisco; Editing by Leroy Leo Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence Akash Sriram Thomson Reuters Akash reports on technology companies in the United States, electric vehicle companies, and the space industry. His reporting usually appears in the Autos & Transportation and Technology sections. He has a postgraduate degree in Conflict, Development, and Security from the University of Leeds. Akash's interests include music, football (soccer), and Formula 1.

Qualcomm's premium smartphone chip reliance, Apple modem loss overshadow upbeat forecast

July 30 (Reuters) - Qualcomm's (QCOM.O), opens new tab reliance on high-end smartphone chip sales and the looming loss of Apple (AAPL.O), opens new tab as a modem customer overshadowed the company's optimistic quarterly forecast on Wednesday, driving shares down more than 6%. The San Diego-based company is the world's largest supplier of modem chips that enable smartphones to connect to wireless data networks. Qualcomm reported its chip segment revenue from non-Apple customers has risen more than 15% so far this fiscal year. Its chip segment sales increase, excluding Apple, "is largely driven by ASP (average selling price) uplift from flagship Android launches rather than broad-based volume recovery," said William McGonigle, analyst at Third Bridge. Taiwan's MediaTek (2454.TW), opens new tab has surpassed Qualcomm this year to become the global leader in smartphone chipset market share, driven by its dominance in affordable and mid-range segments and strong growth in major markets like India, according to Counterpoint Research. Qualcomm reiterated its warning that Apple's shift to its own modem chips in future devices will hit its chip segment revenue. The iPhone 16e, launched earlier this year, was the first Apple smartphone to house a modem developed in-house. Qualcomm forecast September quarter revenue of $10.3 billion to $11.1 billion, compared with analysts' estimates of $10.64 billion, according to LSEG data. The company has not seen signs of customers ordering chips ahead of normal seasonal schedules to try to get ahead of possible tariffs, Chief Financial Officer Akash Palkhiwala told Reuters in an interview. U.S. President Donald Trump's tariff policies have so far provided exemptions for smartphones and semiconductor chips from these levies. But Trump has issued warnings about potential sector-specific tariffs targeting the industry, saying this month that he would "soon announce tariffs on semiconductors." The tariff situation remains highly fluid and complex, with existing Chinese electronics tariffs still in effect despite the exemptions granted for certain categories. Global smartphone shipments climbed 1% in the second quarter, according to research firm IDC, as Apple, a key Qualcomm customer, accelerated shipments to avoid potential tariff impacts. Qualcomm CEO Cristiano Amon said he expects the company's business to supply chips to augmented-reality glasses such as Meta (META.O), opens new tab Ray-Bans to expand. "We have all the designs that matter right now - the number of designs like the Meta glasses is now up to 19, and that continues to accelerate," Amon told Reuters. Qualcomm forecast fiscal fourth-quarter chip segment sales at a midpoint of $9.3 billion, compared with analyst estimates of $9.19 billion, according to Visible Alpha data. The chipmaker reported sales of $10.37 billion for its third quarter ended June 29, beating estimates of $10.35 billion. The company's third-quarter adjusted profit of $2.77 per share topped Wall Street estimates by 6 cents. Qualcomm expects adjusted profit in the fiscal fourth quarter of about $2.85 per share, above estimates of $2.83 per share. Reporting by Akash Sriram and Arsheeya Bajwa in Bengaluru, Stephen Nellis in San Francisco; Editing by Leroy Leo and Bill Berkrot Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence Akash Sriram Thomson Reuters Akash reports on technology companies in the United States, electric vehicle companies, and the space industry. His reporting usually appears in the Autos & Transportation and Technology sections. He has a postgraduate degree in Conflict, Development, and Security from the University of Leeds. Akash's interests include music, football (soccer), and Formula 1.

Qualcomm's Q2 2025 Earnings Beats Estimates As Company Posts Revenue Of $10.37 Billion; Snapdragon Brand Raked In 61 Percent Of The Total, With Chipset Maker Aggressively Diversifying To Offset Apple's Departure As A Customer

Apple is slowly moving away from Qualcomm as the company introduced its C1 5G modem for the iPhone 16e earlier this year. Fortunately, this setback has not prevented the chipset manufacturer from beating analysts' expectations as it posted a strong $10.37 billion in revenue for the second quarter of 2025. As expected, the company's smartphone chipset business generated the majority of the aforementioned figure, and while the San Diego firm has posted some healthy results for this period, it plans to diversify to other segments to help alleviate the financial loss it has to bear for losing Apple as a lucrative customer. The Snapdragon brand failed to beat analysts' expectations of $6.44 billion as it brought in $6.33 billion in revenue, but with MediaTek breathing down Qualcomm's neck by planning to take away some of that market share away by introducing the Dimensity 9500 later this year, the company needs a plan where it can guarantee its growth amidst the fierce competition. Unfortunately, with Apple eventually dropping Qualcomm as a 5G modem supplier, the latter needs to diversify into other areas aggressively. Chief Executive Christiano Amon stated during the Q2 2025 earnings call that the firm is developing silicon for Meta's Ray-Bans smart glasses, along with making chipsets for Windows computers and Quest VR headsets. The CEO also commented that Qualcomm's chip business has grown 15 percent this year without Apple, with the company also looking to expand into data centers so its products can be used for AI. During the earnings call, Qualcomm mentioned that it is in discussions with a major cloud company called a hyperscaler to provide chipsets focused on artificial intelligence. However, the company would only start seeing revenues from fiscal 2028. As for automobiles, Qualcomm says that this business offers a massive growth opportunity, and in the second quarter, this segment grew 21 percent to $984 million.

Why Is Qualcomm Stock Falling Thursday? - Qualcomm (NASDAQ:QCOM)

Qualcomm QCOM posted a solid fiscal third-quarter performance on Wednesday, boosted by continued growth in its automotive and IoT businesses. However, a cautious fourth-quarter outlook and lingering concerns over handset market volatility tempered investor enthusiasm, sending shares down more than 7% in Thursday trading. Analysts across Wall Street responded with cautious optimism. Rosenblatt Securities' Kevin Cassidy, who maintained a Buy rating and a $225 price forecast, described the quarter as a "solid beat". Also Read: Why Qualcomm's Stock Isn't Soaring Like Its Rivals While fourth-quarter projections may not inspire near-term excitement, Cassidy underscored Qualcomm's strength in edge AI, backed by its multi-generation NPU roadmap. He trimmed his fourth-quarter forecast slightly to $10.65 billion in revenue and $2.85 EPS, and now expects fiscal 2025 revenue of $43.52 billion and EPS of $11.88. Bank of America Securities analyst Tal Liani also reiterated a Buy with a $200 forecast, emphasizing Qualcomm's progress in diversifying beyond smartphones. While handset revenue was marginally below expectations due to mix and timing issues, automotive and IoT gains, up 21.3% and 23.7% respectively, provided an effective offset. Liani sees handset revenue rebounding in the next quarter, with forward guidance implying aggregate third-quarter and fourth-quarter performance should beat Street expectations. He also pointed to a stronger-than-expected operating margin that contributed to a 5-cent EPS beat. Liani noted that non-handset revenue now comprises 30% of QCT sales, up from 25% three years ago, and is projected to grow 16% in 2025 and 20% in 2026. He highlighted strong design momentum in automotive, with 12 digital chassis wins and 50 new vehicle launches this year. IoT, meanwhile, is being propelled by AI PCs and smart glasses adoption. However, Liani flagged China as a key risk, with the region accounting for 68% of QCT handset revenue. Qualcomm's expanded relationship with Xiaomi XIACF and leadership in the mid-to-high-end segment provide some insulation, but rising domestic competition, particularly from MediaTek, remains a threat. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started He also pointed to Qualcomm's longer-term ambitions in the data center space as a potential future catalyst. The company, which recently acquired Alphawave, is leveraging its CPU and NPU assets and has entered advanced talks with a major hyperscaler. Though material revenue from this push isn't expected until 2028, Liani views it as a promising growth avenue. J.P. Morgan's Samik Chatterjee echoed these sentiments, reiterating an Overweight rating and a $200 price forecast. He noted that the strength in IoT and automotive helped counteract weaker handset performance. With the fourth quarter guidance pointing to a handset recovery, Chatterjee anticipates combined third and fourth-quarter revenue to exceed prior forecasts. Looking ahead, he forecasts continued momentum in Auto and IoT, projecting 35% and 20% growth respectively in fiscal 2025, with handset sales expected to rise 10%. While Qualcomm faces a revenue headwind from the expected loss of Apple AAPL business, Chatterjee highlighted management's confidence in non-Apple revenues. He anticipates overall revenue growth will slow to single digits in fiscal 2026 and 2027, but expects non-Apple handset revenue, Auto, and IoT segments to drive a return to double-digit growth beyond that period. While Qualcomm's strong quarterly execution reinforces its diversification strategy and long-term AI positioning, near-term caution around the handset cycle and China exposure continues to cloud the outlook for some investors. Price Action: QCOM stock is trading lower by 7.61% to $147.04 at last check Thursday. Read Next: Marvell Stock Rebounds On AI Momentum, New Global Chip Partnership Photo via Shutterstock QCOMQualcomm Inc$147.05-7.55%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum27.91Growth76.42Quality80.32Value49.67Price TrendShortMediumLongOverviewAAPLApple Inc$208.67-0.18%XIACFXiaomi Corp$6.74-2.39%Market News and Data brought to you by Benzinga APIs

Qualcomm Earnings: Non-Smartphone Growth | The Motley Fool

Qualcomm beat analyst expectations for revenue and earnings in the third quarter of fiscal 2025 thanks in part to strong growth outside of its core smartphone-related business. The company's chips power a sizable fraction of smartphones around the world, but other revenue streams are growing much faster. Revenue related to smartphones grew by 7% year over year to $6.3 billion. Meanwhile, automotive revenue surged by 21% to $984 million, and Internet of Things revenue jumped 24% to $1.7 billion. The company's next-generation augmented reality platform was recently on display powering Meta Platforms' (META -0.80%) AI smart glasses, enabling a 1 billion parameter AI model to be run locally. Qualcomm is also making a push into the PC industry. The company's Snapdragon X platform is expected to power more than 100 models by the end of 2026 from all of the major PC OEMs. Revenue from the technology licensing segment was $1.32 billion, up 4% year over year. Growth across Qualcomm's segments helped push adjusted earnings per share up 19% year over year in the third quarter. Despite a solid third-quarter report that featured better-than-expected revenue growth, shares of Qualcomm were down about 5% in after-hours trading on Wednesday. Qualcomm stock has been a laggard so far this year, up just 4% year to date going into the third-quarter report. On top of Qualcomm getting its chips into PCs and augmented reality devices, the company is going after the AI infrastructure market as well. Qualcomm offers server CPUs as well as AI inference chips, and the company announced the acquisition of Alphawave Semi in June. Alphawave specializes in high-speed wired connectivity products, which will help fill out Qualcomm's data center portfolio as demand for AI infrastructure booms. For the fourth quarter, Qualcomm expects to produce revenue between $10.3 billion and $11.1 billion, along with adjusted EPS between $2.75 and $2.95. While Qualcomm stock didn't cooperate in after-hours trading, the company is producing solid results as it diversifies its business and goes after the AI opportunity.

Qualcomm (QCOM) Q3 Revenue Jumps 10% | The Motley Fool

Qualcomm (QCOM -4.63%), a leading company in wireless technology and semiconductor solutions, released its fiscal third quarter earnings on July 30, 2025. The main headline was a 10% rise in revenue to $10.4 billion (GAAP), topping analyst GAAP revenue estimates of $10.34 billion. Non-GAAP earnings per share (EPS) were $2.77, exceeding forecasts by 2.2 %. The company saw particularly strong gains in its automotive and IoT (Internet of Things) segments. Overall, the quarter provided further validation of the company's growth strategy while keeping an eye on risk factors in key regions. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q2 2025 earnings report. Qualcomm is best known for supplying advanced wireless chips and processors. Its products are found in smartphones, cars, industrial equipment, and many connected devices around the world. The company also generates meaningful revenue through licensing its patented technology to other companies integrating wireless connectivity into their products. The company's core focus remains building on its leadership in 5G networks and wireless connectivity, ensuring it remains at the heart of next-generation smartphones. But leadership has been actively pushing to diversify, expanding into fast-growing areas such as automotive electronics and IoT. Its success in these areas increasingly depends on innovation in advanced semiconductors, building a robust intellectual property portfolio, effective capital allocation, and staying ahead in a very competitive semiconductor landscape. The third quarter saw broad revenue growth, with the QCT (Qualcomm CDMA Technologies) segment, which includes mobile chips, automotive chips, and IoT chips, posted revenue of $8,993 million (GAAP), up 11% versus Q3 fiscal 2024. Automotive chips posted their highest quarterly GAAP revenue to date, at $984 million, marking a 21% increase year over year, driven by a surge in design wins and growing demand for digital vehicle platforms. IoT chips, which power industrial and consumer devices, saw revenue climb 24%. Handset chips remained the largest business within QCT, but their revenue grew 7% year over year. However, the automotive and IoT segments combined for 23% year-over-year growth, showing the impact of the company's ongoing diversification away from dependence on mobile handsets. The licensing segment (QTL), which includes intellectual property and patent licensing revenue, delivered $1.32 billion in revenue, a 4% increase year over year. This area continues to supply high margins, but growth remains moderate compared to the chip business. Profitability improved as well, with Non-GAAP net income reaching $3.0 billion, reflecting higher margins in the QCT segment. This was supported by a 3 percentage point increase in QCT's earnings-before-tax margin, which rose from 27% to 30% year over year. Management credits new product launches, such as the flagship Snapdragon X85 5G modem and platform, for helping maintain the company's technological edge in both mobile and emerging device markets. The quarter also featured several notable developments affecting future direction. Qualcomm announced a planned $2.4 billion acquisition of Alphawave IP Group, aimed at strengthening its position in data center and connectivity chips beyond the core mobile market. Additional investments into industrial IoT were highlighted by the completion of deals for Edge Impulse and FocusAI, adding AI development and computer vision technology to its portfolio. The company returned $3.8 billion to shareholders through dividends and share buybacks. The quarterly dividend remained steady and was not raised, but continued regular payments align with management's commitment to return 100 % of free cash flow to shareholders in fiscal 2025. For the fiscal fourth quarter, management expects GAAP revenue to be between $10.3 billion and $11.1 billion, and projects Non-GAAP diluted EPS in the range of $2.75 to $2.95. QCT revenue is forecast at $9.0 billion to $9.6 billion with QTL revenue expected between $1.25 billion and $1.45 billion. This guidance assumes continued strength in automotive and IoT, offsetting expected moderation in handset revenue due to normal seasonal shifts and a planned reduction in supply to a major customer's new product cycle. Investors should continue to monitor Qualcomm's progress in diversifying its product mix and customer base, especially amid risks posed by U.S.-China trade dynamics. Leadership noted that a significant share of business remains in China, where national security policies and shifting regulations can affect both chip sales and licensing. Competitive pressures, particularly from MediaTek and Samsung in smartphones and from new entrants in automotive and IoT, are likely to persist.

Qualcomm forecasts revenue above estimates, betting on AI use to drive chip demand

(Reuters) -Qualcomm projected current-quarter sales above Wall Street expectations on Wednesday, wagering that growing AI capabilities in consumer devices will boost demand for its semiconductors despite ongoing global trade uncertainties. The San Diego-based company is the world's largest supplier of modem chips that enable smartphones to connect to wireless data networks. A major strategic concern for Qualcomm is its relationship with Apple, its top customer. Qualcomm's shares were down about 4% in extended trading after it reiterated its warning that Apple's shift to its own modem chips in its future devices will hit its chip segment revenue. The iPhone 16e, launched earlier this year, was the first Apple smartphone to house a modem developed in-house. Qualcomm forecast revenue between $10.3 billion and $11.1 billion for the September quarter, compared with estimates of $10.64 billion, according to data compiled by LSEG. The company has not seen signs of customers ordering chips ahead of normal seasonal schedules to try to get ahead of possible tariffs, Chief Financial Officer Akash Palkhiwala told Reuters in an interview. U.S. President Donald Trump's tariff policies have so far provided exemptions for smartphones and semiconductor chips from these levies. But Trump has issued warnings about potential sector-specific tariffs targeting the industry, stating as recently as this month that he would "soon announce tariffs on semiconductors." The tariff situation remains highly fluid and complex, with existing Chinese electronics tariffs still in effect despite the exemptions granted for certain categories. Global smartphone shipments climbed 1% in the second quarter, according to research firm IDC, as Apple, a key Qualcomm customer, accelerated shipments to avoid potential tariff impacts. Still, the company said its chip segment revenue from customers excluding Apple was up more than 15% so far this fiscal year. Qualcomm CEO Cristiano Amon said he expects the company's business to supply chips to augmented-reality glasses such as Meta Ray-Bans to expand. "We have all the designs that matter right now - the number of designs like the Meta glasses is now up to 19, and that continues to accelerate," Amon told Reuters in an interview. Qualcomm forecast fiscal fourth-quarter chip segment sales at a midpoint of $9.3 billion, compared with analyst estimates of $9.19 billion, according to Visible Alpha data. The chipmaker reported sales of $10.37 billion for its third quarter ended June 29, beating estimates of $10.35 billion. The company's third-quarter adjusted profit of $2.77 per share compared with estimates of profit of $2.71 per share. It expects adjusted profits in the fiscal fourth quarter of about $2.85 per share, above estimates of $2.83 per share. (Reporting by Akash Sriram in Bengaluru and Stephen Nellis in San Francisco; Editing by Leroy Leo)