Qualcomm shares soar 16% on CEO comments about China orders, hyperscaler customer
Qualcomm's shares rose 16% following CEO Cristiano Amon's comments about improving demand in China and new opportunities with hyperscaler customers. Despite a global decline in smartphone and PC shipments, Qualcomm's licensing model provides visibility into end-market activity. The company is expanding in data center and automotive chips, with its automotive segment growing 38% year-over-year.
- ▪Global smartphone shipments are down more than 4%, according to the International Data Corporation.
- ▪Qualcomm's automotive segment grew 38% year-over-year due to increased adoption of its automated driving processors.
- ▪Apple is replacing Qualcomm's modems in iPhones with its own in-house chips starting in 2025.
- ▪Qualcomm is working with OpenAI and other AI companies on future AI device designs.
- ▪The memory price surge has not affected Qualcomm's data center chip shipments, as the company is still scaling in that market.
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This year has brought a memory price surge that's hit Qualcomm's end market of consumer electronics. Gartner predicts PC prices will rise 17% this year, and shipments will decline 10.4%. Global smartphone shipments are down more than 4%, according to the International Data Corporation, breaking an upward trend that had been going since mid-2023. When it comes to smartphone sales in China, Amon said on a call with CNBC that the current quarter will be the bottom because "customers are running out of inventory."Much of Qualcomm's revenue comes from licensing fees it charges for its core technology used inside nearly every smartphone.
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