Qualcomm shares soar on CEO comments about China, large customer
Qualcomm shares staged a dramatic turnaround after the bell on Wednesday as CEO Cristiano Amon stated on the earnings name that it will start transport information middle chips to “a large hyperscaler” throughout the calendar 12 months.
The inventory initially fell as a lot as 7% after the chipmaker reported second-quarter earnings that topped Wall Street estimates however fell brief on ahead steerage.
Amon would not disclose the customer, however stated extra particulars will come throughout Qualcomm’s investor day in June.
Although it is largely fallen behind giants like Nvidia within the race for chips to energy artificial intelligenceQualcomm introduced its personal information middle chips final 12 months. OpenAI can be reportedly partnering with Qualcomm to develop an AI chip for smartphones that would energy a coming OpenAI system run by AI brokers.
“We are in a period of profound industry transformation — the rise of AI agents is reshaping our roadmap across every platform we develop,” Amon stated on the earnings name.
The US chipmaker reported adjusted earnings per share of $2.65, beating estimates by 9 cents. Revenue was in keeping with expectations at $10.6 billion, however the third-quarter income forecast got here in need of expectations.
Qualcomm expects Q3 income within the vary of $9.2 billion to $10 billion, in need of the $10.19 billion StreetAccount analysts have been on the lookout for.
This 12 months has introduced a reminiscence worth that emerges that is hit Qualcomm’s finish market of client electronics. Gartner predicts PC costs will rise 17% this 12 months, and shipments will decline 10.4%. Global smartphone shipments are down greater than 4%, in accordance with the International Data Corporation, breaking an upward pattern that has been going since mid-2023.
When it involves smartphone gross sales in China, Amon stated on a name with CNBC that the present quarter would be the backside as a result of “customers are running out of inventory.”
Much of Qualcomm’s income comes from licensing charges it expenses for its core expertise used inside practically each smartphone. Amon instructed CNBC that this a part of its enterprise, “allows us to know exactly how much stuff happens at the end market.”
Qualcomm designs chips and wi-fi applied sciences for smartphones, private computer systems, vehicles and different units. It’s greatest recognized for its Snapdragon processors that energy Android telephones and modem expertise that allows cell connectivity similar to 5G.
Amon instructed CNBC the reminiscence scarcity has not impacted its information middle chip shipments coming this 12 months, including that Qualcomm is simply coming into the house, so its “scale is probably not the same as the established providers.”
Qualcomm’s automotive section was up a document 38% year-over-year, as Amon stated its “starting to get scale” on its processors that energy automated driving.
In smartphones, Qualcomm misplaced a serious customer when Apple started changing its modems in iPhones with its personal in-house chip beginning in 2025.
Now, OpenAI might be poised to be Qualcomm’s subsequent main smartphone customer, if CEO Sam Altman makes good on his plan to develop an AI device in two years.
“You should expect that we’re working not only with them, but most of the AI companies today,” Amon instructed CNBC. “So the design engagement is very robust.”
CNBC’s Kristina Partsinevelos contributed to this report.
