Important points
- Qualcomm shares rose more than 4% in after-hours trading Wednesday after the mobile phone chip maker reported better-than-expected guidance for the current quarter as demand for premium smartphones equipped with AI rises.
- The company reported a 40% increase in quarterly sales from Chinese mobile phone manufacturers.
- Watch how Qualcomm stock reacts to the two twin peaks around $176 that formed in March and April.
Qualcomm (QCOM) shares rose in after-hours trading Wednesday after the mobile chip giant reported strong revenue and better-than-expected guidance for the current quarter as demand for artificial intelligence (AI)-powered smartphones increases. It rose more than 4%.
The company expects June quarter sales to be in the range of $8.8 billion to $9.6 billion, with the midpoint of its guidance of $9.2 billion above the consensus of $9.05 billion. The company expects earnings per share (EPS) to range from $2.15 to $2.35 for the period, beating Wall Street expectations of $2.17 per share.
The San Diego, California-based company reported adjusted earnings of $2.44 per share for the fiscal second quarter ending March 24, beating analyst modeled expectations of $2.32 per share. I surpassed it by a margin. Revenue for the quarter was $9.39 billion, an improvement of 1% from the same period a year ago, and beat the street estimate of $9.34 billion.
Strong demand from China
The company expects mobile sales to decline this quarter due to fewer smartphone launches over the summer, but will continue to see strong demand for “premium-tier” smartphones that require more advanced chips. He said he felt supported. It noted that revenue from Chinese mobile phone manufacturers increased by 40% year-on-year.
“We see no signs of weakness in China's Android premium market,” said Qualcomm CEO Cristiano Amon. “A lot of the strength really comes from premium devices from Oppo, OnePlus and Vivo,” he added.
At the financial results conference, Amon also pointed out that next-generation devices equipped with AI and generative AI are contributing to driving demand for premium smartphones. “The first instances of On-Device AI and Gen AI are being launched on Premium His devices, and that is resonating with consumers.”
Prices to watch amid earnings-driven buys
Qualcomm stock has been on an uptrend for the most part since early December last year, when the 50-day moving average broke above the 200-day moving average, forming a bullish golden cross signal. Last week's retracement below the 50 MA immediately attracted buying interest, indicating the stock's resilience leading up to the company's quarterly results.
If the stock continues to rise following Qualcomm's better-than-expected earnings report, investors will be watching to see how the price reacts to the twin peaks around $176 that formed in March and April. There is a need to. A close above this level could break out of a multi-month uptrend line dating back to late October.
Qualcomm shares rose 4.1% to $170.77 in after-hours trading. Through the close of trading on Wednesday, shares had gained about 41% in the last 12 months.
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