5 Qualcomm Analysts Highlight Q2 Results, Q3 Guidance: 'Solid Beat And Raise Amid Carnage Elsewhere In Smartphone Land'

Zinger Key Points
  • Qualcomm's diversification efforts are sized up by analysts after the Q2 report.
  • Automotive and AI PCs are two areas that could provide future growth, analysts say.

Technology company Qualcomm Inc QCOM reported second-quarter financial results Wednesday that saw revenue and earnings per share beat estimates from analysts.

Analysts share their takes on the quarter and what's ahead for the company.

  • Cantor Fitzgerald analyst C.J. Muse has a Neutral rating and $190 price target.
  • KeyBanc analyst John Vinh has an Overweight rating and $205 price target.
  • Oppenheimer analyst Rick Schafer has a Perform rating and no price target.
  • JPMorgan analyst Samik Chatterjee has an Overweight rating and raises the price target from $170 to $185.
  • Rosenblatt analyst Kevin Cassidy has a Buy rating and $200 price target.

Check out other analyst stock ratings.

Cantor Fitzgerald: Outperformance in China and leverage to premium smartphones were keys in Qualcomm's quarterly report for Muse.

"A solid beat and raise amid carnage elsewhere in smartphone land," Muse said.

The analyst also highlighted the company's record quarterly revenue for Qualcomm's automotive segment and the backlog for the segment now standing at $45 billion.

Muse also said more AI PC and products like AI smartphones are accelerating. The analyst said clear conviction on whether the AI smartphone upgrade from Qualcomm comes in 2025 or 2025 could provide more excitement.

"Add it all up and ours and likely consensus estimates are moving higher," Muse added.

KeyBanc: Second quarter results showed Qualcomm's high-end smartphone segment having robust demand, Vinh said.

The analyst also pointed to Qualcomm's automotive segment as showing strength.

"Despite broader auto weakness, QCOM saw strength as its new platforms continue to ramp, while mgt increased its auto design win pipeline to $45B from $30B (Sept '22)," Vinh said.

The analyst said RF content gains in the iPhone 16 and the launch of SnapDragon 8 Gen 4 are catalysts that could improve market share.

"We increasingly view QCOM as an edge AI beneficiary," Vinh adds.

Oppenheimer: Market share gains from Apple were a key in Qualcomm's earnings report for Schafer.

"We believe QCOM won RF share (from SWKS) in upcoming iPhone 16 refresh, citing power efficiency from bundling with modem," Schafer said.

The analyst cautions that future iPhone revenue could be at risk for Qualcomm as Apple works to insource its modem.

Schafer said Qualcomm's China Android results were up 40% year-over-year in the first half of the fiscal year, marking another key to the company's report.

"While we recognize QCOM's leading position in modem and single-chip integrated chipset solutions, we believe the company is over-exposed to the mobile market, with its diminishing growth and increasing competition."

JPMorgan: Robust smartphone and automotive strength were keys in Qualcomm's second quarter, Chatterjee said.

The analyst highlighted Qualcomm's third quarter guidance as a key from Wednesday's report.

"The guidance for limited seasonal decline into F3Q helped by seasonal but robust demand trends in Android Smartphone, as well as robust ramps in IoT and Autos are helping set up a more positive revenue outlook relative to expectations heading into the quarter," Chatterjee said.

Chatterjee said Qualcomm's third quarter was supposed to be the "trough quarter due to seasonality." Limited downside could reassure investors, the analyst said.

"While Qualcomm's diversification beyond Smartphones has received little attention while the Smartphone market was impacted by headwinds, the stabilization of market trends are now leading to a more positive set up with the growth in Autos and IoT enabling Qualcomm to budge typical smartphone seasonality."

Rosenblatt: Android headset demand was healthy in Qualcomm's second quarter, Cassidy said.

"We continue recommending the QCOM shares for the company's technology stimulating a strong handset upgrade cycle based on Gen AI applications," Cassidy said.

The analyst said Qualcomm is successful in moving its platforms in the Automotive and IoT sectors.

"We see the PC market as the next driver for Qualcomm's revenue growth."

The analyst said the next-gen Windows AI PCs powered by Snapdragon could show Qualcomm as a leader in performance on-device AI.

QCOM Price Action: Qualcomm shares are up 9% to $179.35 on Thursday, hitting new 52-week highs.

Now Read: Will Apple Crack AI Code And Spark Investor Optimism? Tim Cook’s Tech Strategy In Focus Amid Expected Q2 Slump

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