Qualcomm's Recovery Boosts Stock Amid Semiconductor Market Challenges

Qualcomm, a leading mobile chipset manufacturer based in the United States, is gearing up to publish its Q4 FY'24 financial results. Analysts anticipate earnings of $2.57 per share, which represents a 25% increase compared to the previous year, alongside projected revenues of $9.95 billion, marking a 14% year-over-year growth. This positive outlook is attributed to several factors, including a resurgence in the smartphone market and heightened interest in generative AI technologies that enhance chipset sales. The company's stock has risen approximately 20% year-to-date, significantly outperforming its semiconductor peer Intel, which has seen a decline of about 50% during the same timeframe. Qualcomm's Q3 FY'24 results indicated a revenue of $8.1 billion, a 12% increase from the previous year, with expectations for Q4 revenue to fall between $8.1 billion and $8.7 billion. Notably, sales to China surged by 50% year-over-year, reflecting strong demand in that market. Qualcomm is also witnessing increased interest in its high-end chipsets, such as the Snapdragon 8 Gen 3, which are optimized for AI applications. The company reported an impressive 87% year-over-year increase in automotive revenue, indicating its successful expansion into this sector. With a projected automotive revenue exceeding $4 billion by FY'26, Qualcomm is solidifying its market position. Despite facing competition from companies like Huawei, which is shifting to its proprietary Kirin processors, Qualcomm's strategic investments in automotive and AI technologies are expected to drive future growth. The company's stock currently trades at around $170 per share, with a price estimate of $189, suggesting a favorable outlook for investors.