Qualcomm dropped its fourth-quarter earnings on Wednesday and smashed Wall Avenue’s targets. Income got here in at $11.27 billion, method above the $10.79 billion estimate.
Adjusted earnings per share hit $3.00, additionally beating the $2.88 that analysts anticipated, based on LSEG. In comparison with final 12 months’s $10.24 billion, income jumped 10%.
Nevertheless it wasn’t all excellent news; Qualcomm took a giant tax hit and reported a web lack of $3.12 billion, or $2.89 per share, after posting a $2.92 billion revenue the identical quarter final 12 months.
Wanting forward, Qualcomm is focusing on $11.8 billion to $12.6 billion in income for the subsequent quarter. That midpoint ($12.2 billion) blows previous the $11.62 billion common analyst forecast.
On earnings, the chipmaker expects to ship between $3.30 and $3.50 per share, whereas analysts had penciled in simply $3.31. These projections got here straight from Qualcomm’s assertion on Wednesday night.
AI chips increase inventory, whereas handset, auto, and IoT beat estimates
Qualcomm has all the time made most of its cash from cell chips. It builds the processors and modems that go into Samsung’s flagship telephones and modems for Apple’s iPhones.
However CEO Cristiano Amon stated through the name that Qualcomm is aware of Apple gained’t stick round eternally. “We anticipate to wind down our modem provide to Apple over the subsequent few years,” he stated.
So the corporate’s been shifting. It’s been making chips for Home windows PCs, Meta’s AR glasses, and virtual-reality headsets, attempting to develop into something outdoors smartphones.
The corporate’s large wager now? AI {hardware}. Final week, Qualcomm introduced plans to launch two new AI accelerator chips, which despatched the refill 11% proper after the information. The brand new chips, the AI200 (coming 2026) and AI250 (2027), aren’t fundamental elements.
Qualcomm stated each chips shall be obtainable in full techniques that take up a complete liquid-cooled server rack. That places it in the identical {hardware} league as Nvidia and AMD, whose rack setups can stack as much as 72 GPUs to energy huge AI fashions.
Up to now, Qualcomm inventory is up 17% this 12 months, behind Nasdaq’s 22%, however nowhere close to Nvidia’s 45% or AMD’s 112%. It’s taking part in catch-up in AI, no query.
On the section stage, Qualcomm’s handset division introduced in $6.96 billion, up 14% 12 months over 12 months. Its automotive unit pulled $1.05 billion, up 17%, and the IoT division, the place the corporate lumps in gross sales to Meta, did $1.81 billion, a 7% improve. StreetAccount confirmed that every one three teams beat expectations.
The one laggard? The licensing income, which income dropped 7% to $1.41 billion. Nonetheless, that determine additionally beat analyst estimates. Even with the Apple break up looming, Qualcomm’s push into different markets — AI, vehicles, sensible units — is exhibiting up within the numbers.
“We’re positioning our roadmap throughout a number of finish markets, particularly AI,” stated Amon. “This quarter reveals our diversification technique is taking maintain.”
So, backside line: Qualcomm beat earnings, gave a robust forecast, posted features in practically each unit, and is betting its future on AI chips sufficiently big to fill server racks.
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