Qualcomm (QCOM) Drops 5% as Smartphone Revenue Worries Overshadow Strong Q1 Earnings

GuruFocus.com
07 Feb

Qualcomm (NASDAQ:QCOM) dropped 5.08% to $166.93 as of 11:49 a.m. ET, as investor concerns over smartphone revenue growth overshadowed the company's better-than-expected fiscal first-quarter results and positive outlook.

  • Warning! GuruFocus has detected 5 Warning Signs with QCOM.

During the earnings call, CFO and COO Akash Palkhiwala acknowledged a sequential decline in QCT handset revenues due to seasonality and lower Apple (AAPL) shipments, but noted that year-over-year growth is expected, fueled by increased shipments for Samsung's Galaxy S25.

Analyst Reactions

  • KeyBanc Capital Markets maintained a Sector Weight rating, highlighting strong demand for premium smartphones and Qualcomm's 100% share in the Samsung Galaxy S25 chipset.
  • Morgan Stanley reaffirmed an Equal-weight rating with a $204 price target, citing solid chipset growth but warning of potential seasonal weakness in June and September.
  • Evercore kept an In Line rating but cut its price target to $179 from $199, saying the QCT segment is strong across handset, IoT, and automotive, but further visibility into PC traction is needed for a more bullish stance.

Despite positive results, analysts pointed to Apple's internal modem ramp and uncertainty around Qualcomm's licensing business (QTL) without Huawei as potential risks.

This article first appeared on GuruFocus.

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