(Reuters) – Qualcomm shares rose 4% in pre-market trading on Thursday after the smartphone-focused semiconductor maker signaled a recovery in AI-powered demand, particularly in China, after two years of weakness. Rose.
The company said Wednesday that sales to Chinese smartphone makers surged 40% in the first half of the fiscal year. This is because Chinese buyers are gravitating toward more expensive devices that can support AI chatbots.
“Chinese vendors that have traditionally relied heavily on MediaTek will start leveraging Qualcomm's high-end chips more as they focus on their AI agenda,” said IDC analyst Nabila Popal.
“These are further upsides for Qualcomm, as it comes from a difficult past two years and much of this year's recovery will come from Chinese OEMs.”
Qualcomm on Wednesday expected third-quarter sales to beat expectations, also benefiting from the Internet of Things (IoT) and automotive sectors.
The company, the largest supplier of smartphone chips, was expected to add more than $8 billion to its market value based on pre-market trends. Other semiconductor companies such as Arm and Broadcom also rose 2.8% and 2.4%, respectively.
In the high-end segment, AI buzz and foldable products could help Android smartphone vendors further differentiate themselves from Apple, according to preliminary data from research firm IDC. It is said that interest has increased.
Analysts at Wolfe Research are optimistic that numbers could rise further given last year's weak Android cycle and potential improvements in the Internet of Things (IoT) as inventories normalize. “
At least 14 analysts raised their price targets for Qualcomm, according to LSEG data.
Qualcomm stock is up 13.5% this year after rising 31.5% in 2023.
Shares of Apple, which is scheduled to report earnings after the market closes Thursday, rose 1.05% in premarket trading.
(Reporting by Harshita Mary Varghese; Editing by Sriraj Kaluvila)