Qualcomm Jumps as AI Creates a Smartphone Rebound

Qualcomm was the latest chipmaker to release its results and an improvement in the smartphone market, and shares jumped to record highs on Thursday.

QCOM – Daily Chart

QCOM – Daily Chart

QCOM shares opened on Thursday around the previous all-time high of $177.64 and have set new highs at $180. Whether this breakout holds up will now determine the path ahead.

Qualcomm shares rose more than 4% on Thursday after the smartphone-focused chipmaker highlighted an AI-fueled rebound in demand, especially in China, after a two-year slump.

Sales to Chinese smartphone makers were up 40% in the first half of the company’s fiscal year. Buyers have been gravitating toward higher-priced devices that can accommodate AI assistants.

“We’re optimistic that numbers can be driven higher, given last year’s muted Android cycle and the likelihood of IoT improvement as inventory normalises,” analysts at Wolfe Research said. According to LSEG data, at least 14 analysts raised their price targets on Qualcomm after the results. Qualcomm also released its Snapdragon range of chips, improving the performance of mobile devices.

Qualcomm reported adjusted earnings of $2.44 per share with revenue of $9.39 billion, beating analyst expectations of $2.32 and $9.34B.

“Given the state of some recent peer reports we believe there was some nervousness around Qualcomm in this print, and yet the company delivered with certainly the best wireless-related results so far this earnings season,” Bernstein analysts wrote after the earnings release.

Management guidance for the company was in line with current expectations, which also helped to soothe any fears over the company’s path. Qualcomm is the latest chipmaker to release decent earnings against a backdrop of concerns about a downturn in the sector.

The company highlighted a strong performance in its segments, with record wireless sales and increasing AI-enabled shipments. It also noted strong growth in the automotive sector.

QCOM shares have set new all-time highs and need to hold the current breakout to see further gains in the weeks ahead.

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