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Qualcomm is among the world’s biggest suppliers of the modem chips that connect smartphones to wireless data networks.Aly Song/Reuters
Qualcomm QCOM-Q on Wednesday forecast fiscal first-quarter sales and profit above Wall Street expectations, powered by a renewal of end-market demand in the smartphone industry.
For the current fiscal first quarter, Qualcomm said it expects sales and adjusted profit with a midpoint of US$12.2-billion and US$3.40 per share, above analyst estimates of US$11.62-billion and US$3.31 per share, according to LSEG data.
For the fiscal fourth quarter ended Sept. 28, Qualcomm reported sales and adjusted profit of US$11.27-billion and US$3 per share, compared with Wall Street expectations of US$10.79-billion and adjusted profit of US$2.88 per share.
Qualcomm is among the world’s biggest suppliers of the modem chips that connect smartphones to wireless data networks but has been expanding into other fields such as laptops and automobiles. It is a longtime supplier to Apple, though Qualcomm has told investors since 2021 that it expects Apple to eventually transition to its own modems.
Qualcomm announces new AI chips in data center push, shares surge
In an interview, Qualcomm CEO Cristiano Amon told Reuters that the company’s results and forecast were driven by a wave of consumers upgrading midpriced smartphones to more expensive devices to handle AI apps, with the market beginning to divide sharply between low-end devices and the pricier premium devices Qualcomm has historically relied on to drive profit.
“You don’t have anything in the middle,” Amon said. “And that’s kind of a global phenomenon that’s happening in China, that’s happening in India. We continue to see an expansion of the premium tier.”
Qualcomm shares have risen about 12.5 per cent this year, below the 20.9 per cent gain of the Nasdaq Composite Index, as investors have worried about the impact of tariffs on the company’s smartphone chip business and whether it was positioned to profit from the artificial intelligence boom.
Last month, however, Qualcomm unveiled a new series of AI chips for data centres that it said will roll out next year, sending its shares up 20 per cent in a single day. Qualcomm said on Wednesday that the new U.S. tax legislation resulted in a US$5.7-billion noncash charge, or about US$5.29 per share, in its fiscal fourth quarter and that it expects to be subject to the U.S. corporate alternative minimum tax in its next fiscal year.
The company said the move did not affect its adjusted results.
