“Cutting-Edge AI Technology Drives Surge in Smartphone Sales”
By Stephen Nellis and Arsheeya Bajwa (Reuters) – Qualcomm, a leading player in the semiconductor industry, has made a bold projection for sales and profits, surpassing the expectations of industry analysts. The surge in demand for smartphones, laptops, and various devices powered by Qualcomm’s chips, enhanced by innovative artificial intelligence features, has played a pivotal role in this forecast.
For the current fiscal quarter, Qualcomm anticipates sales in the range with a midpoint of $10.75 billion and adjusted profits of $2.80 per share, both exceeding the estimates put forth by analysts projecting sales of $10.34 billion and adjusted profit of $2.69 per share, as indicated by data from LSEG. The company’s financial report for the fiscal first quarter concluded on December 29 revealed sales of $11.67 billion and adjusted profits of $3.41 per share, significantly outperforming analyst estimations of $10.93 billion for sales and adjusted profits of $2.96 per share, according to data from LSEG.
Highlighting its global influence, Qualcomm recently secured a significant deal with Samsung Electronics to supply chips for the tech giant’s flagship smartphones worldwide. Collaborating with industry giants like Microsoft and computer manufacturers, Qualcomm, headquartered in San Diego, California, is actively engaged in offering a diverse portfolio of laptops and PCs powered by its cutting-edge chips.
Following the announcement of these impressive results, Qualcomm’s shares experienced slight fluctuations, remaining within 1% of their closing price. At the midpoints of the projected ranges, Qualcomm anticipates second-quarter revenues of $9.2 billion for its chip business and $1.35 billion for patent licensing, surpassing Wall Street estimates of $8.90 billion for chips and $1.43 billion for patent licensing, as per LSEG data.
Although Qualcomm has successfully diversified its product offerings into sectors such as PCs and automobiles, the smartphone market continues to be its stronghold. The company supplies leading smartphone manufacturers including Apple, Xiaomi, Oppo, and Vivo. Despite challenges in the Chinese smartphone market due to weak demand, Qualcomm remains a key player, with the Chinese government stepping in to offer subsidies for low- and mid-tier handset sales.
In the fiscal first quarter, Qualcomm recorded handset revenue of $7.57 billion, exhibiting a 13% increase from the previous year’s $6.69 billion. However, this growth rate fell slightly below the 20% increase observed in the company’s chip revenues overall. Qualcomm’s automotive chip revenue in the same quarter reached $961 million, with sales from “internet of things” chips, which also encompass PC chip sales, totaling $1.55 billion. Comparatively, a year earlier, automotive chip revenue stood at $598 million, while internet of things revenue reached $1.1 billion.
Analysis from Visible Alpha indicated that analysts had expected $905 million in automotive revenue and $1
