Investing.com -- Qualcomm delivered fiscal second-quarter results that topped Wall Street estimates, underpinned by improved chip sales amid an ongoing recovery in smartphone demand.
Qualcomm Incorporated (NASDAQ:QCOM) rose more than 4.4% in premarket trading Thursday.
Qualcomm reported adjusted earnings of $2.44 per share on revenue of $9.39 billion, beating projections of $2.32 and $9.34B, according to an Investing.com forecast based on a poll of analysts.
The beat on the top and bottom lines were driven by by handset chip sales rising 1% to $6.18B in Q2 from a year earlier.
For Q3, the company guided adjusted EPS in a range of $2.15 to $2.35 on revenue of revenue in the range of $8.8B to $9.6B, in-line with analyst estimates for adjusted EPS of $2.18 on revenue of $9.04B.
“Given the state of some recent peer reports we believe there was some nervousness around Qualcomm into this print, and yet the company delivered with certainly the best wireless-related results so far this earnings season,” Bernstein analysts commented in a post-earnings note.
Looking ahead, Bernstein predicts a solid outlook for QCOM, with September EPS guidance matching the current consensus, which should mitigate near-term risks.
They highlight strong product performance, increasing AI-enabled shipments, notable radio frequency (RF) content gains, and promising diversification in PC and automotive sectors, noting a significant growth in the auto pipeline.
The firm reiterated an Outperform rating on QCOM stock and lifted the target price from $200 to $220.
Similarly, KeyBanc Capital Markets analysts said they were “encouraged” with Qualcomm’s quarterly report, pointing out several catalysts that could drive future growth.
These include RF content gains in the upcoming iPhone 16 and the launch of the Snapdragon 8 Gen 4 processor, featuring the Nuvia ARM cores, “which we believe will allow QCOM to regain 100% share in the GS25,” they wrote.
“We're fine-tuning ests and remain OW, as we increasingly view QCOM as an edge AI beneficiary,” KeyBanc analysts added.
(Yasin Ebrahim contributed reporting)