Along with announcing two new chips that promise to challenge even the mighty Apple Inc (NASDAQ:AAPL), Advanced Micro Devices Inc (NASDAQ:AMD) and Intel Corporation (NASDAQ:INTC), Qualcomm Incorporated (NASDAQ:QCOM) topped estimates with its latest quarterly results, signaling the chip market slump could be over. Upon results, Qualcomm stock rose more than 3% in extended trading as it provided a strong guidance that was supported by an optimistic China outlook, renewed contract with Apple and disclosed plans for a Microsoft Corporation (NASDAQ:MSFT)-supported and renewed push into the laptop market.

On Wednesday, Qualcomm topped top and bottom-line estimates with its fourth fiscal quarter results. For the quarter that ended on September 24th, Qualcomm reported revenue of $8.67 billion that topped LSEG’s estimate of $8.51 billion despite declining 24% YoY while adjusted revenue for the fiscal year contracted 19% YoY to $35.83 billion. For the fiscal fourth quarter, Qualcomm posted a net profit of $1.49 billion or $1.32 per share which translates to a 48% YoY decrease. Adjusted earnings amounted to $2.02, topping the expected $1.91.

Its biggest division that sells handset chips and processors, QCT, reported sales contracted 26% to $7.37 billion. Internet of Things segment with includes chips that are used by Meta Platforms (NASDAQ:META) in its Quest headsets, reported revenue dropped 31% YoY as it amounted to $1.38 billion. Its small automotive business was a bright spot as the segment continues to grow with sales rising 15% YoY to $535 million.

With its fortunes tied to the smartphone industry, Qualcomm inevitably suffered as the industry tanked after the Covid-induced boom. But with its latest results, Qualcomm provided hope that the slump that lasted almost two years might be over. Moreover, Qualcomm is intensely working on its positioning for the generative AI era. The two Android and Windows PC chips for Microsoft with improved AI features it announced in October seem to be its entry ticket to the generative AI table, while it still continues to supply Apple with 5G models for handsets through 2026. When it provided details about the chip for Microsoft-Windows laptops, Qualcomm claimed that they will make these devices faster at some tasks than Apple-made Macs. Besides Microsoft, Alphabet (NASDAQ:GOOG)-owned Google also announced it plans to take advantage of Qualcomm’s promising chip creation that will the first to challenge Apple. But, although there are positive signals that the chip industry is rebounding, Qualcomm is also facing intense competition while also being challenged by Huawei Technologies that resumed producing its own smartphone chips.