Qualcomm Incorporated QCOM reported strong first-quarter fiscal 2025 results, with adjusted earnings and revenues beating the respective Zacks Consensus Estimate, driven by healthy demand trends in Android handsets and automotive businesses. Both metrics improved year over year, led by the strength of the business model, revenue diversification and the ability to respond proactively to the evolving market scenario. 

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Record Automotive & Handset Revenues Buoy QCOM

Qualcomm is increasingly focusing on the seamless transition from a wireless communications firm for the mobile industry to a connected processor company for the intelligent edge. Driven by solid 5G traction, greater visibility and a diversified revenue stream, the company is well-positioned to meet its long-term revenue targets.

Qualcomm is witnessing healthy traction in EDGE networking, which helps transform connectivity in cars, business enterprises, homes, smart factories, next-generation wearables and tablets. The company intends to harness artificial intelligence (AI) to meet increased demands for essential products and services that are the building blocks of digital transformation in a cloud economy.

The automotive telematics and connectivity platforms, digital cockpit and C-V2X solutions are fueling emerging automotive industry trends such as the growth of connected vehicles, the transformation of the in-car experience and vehicle electrification. Qualcomm believes it is on track to become the largest smartphone radio frequency front-end supplier by revenue in the near future. Automotive revenues rose 61% to a record high of $961 million, driven by increased content in new vehicle launches with its Snapdragon Digital Chassis platform, with automakers deploying high-performance, low-power computing and connectivity chips to bring next-generation experience to consumers. Handset revenues jumped 13% to an all-time high of $7.57 billion, led by healthy traction in premium Android handsets. 

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QCOM Focusing on AI Chips

Qualcomm is currently foraying deeper into the realm of AI capabilities within the laptop and desktop business with the launch of the Snapdragon X chip for mid-range AI desktops and laptops. The strategy is aimed at moving beyond the slowing smartphone industry, which is its primary breadwinner. In addition to diversifying its revenue stream, this is likely to further extend QCOM’s AI footprint.

The Snapdragon X SoC (system-on-chip) is the fourth such product in the Snapdragon X processor line, following the successful launch of the Snapdragon X Plus 8-core, Snapdragon X Plus and Snapdragon X Elite series. Based on a 4-nanometer process, the Snapdragon X chip comprises an 8-core Oryon central processor, a graphics component and a neural processing unit (NPU). The NPU accelerates AI workloads, offering 45 TOPS (trillions of operations per second), making it an ideal platform to power Copilot+PCs – Microsoft Corporation’s MSFT vision of AI-first, flagship Windows hardware. These PCs with AI-powered tools and applications are set to be launched in the first quarter at around $600, making them an affordable option for the masses.

Leveraging processors with multi-core CPUs with cutting-edge features, amazing graphics and worldwide network connectivity, Qualcomm Snapdragon mobile platforms are fast and have superb power efficiency. Smartphones and mobile devices built with Snapdragon mobile platforms enable immersive augmented reality and virtual reality experiences, brilliant camera capabilities, superior 4G LTE and 5G connectivity with state-of-the-art security solutions.

Price Performance

Qualcomm shares have gained 9.7% over the past year compared with the industry’s growth of 28.3%. It has lagged Hewlett Packard Enterprise Company HPE and Broadcom Inc. AVGO — a couple of other major players in the industry.

QCOM Stock One-Year Price Performance

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Estimate Revision Trend for QCOM

Earnings estimates for Qualcomm for fiscal 2025 have moved up 1.3% to $11.36 over the past seven days, while the same for fiscal 2026 has jumped 2.4% to $12.61. The positive estimate revision depicts bullish sentiments for the stock.

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End Note

With solid fundamentals and healthy revenue-generating potential driven by robust demand trends for AI chips, Qualcomm appears to be a solid investment proposition. A strong emphasis on quality, diligent execution of operational plans and continuous portfolio enhancements are driving more value for customers. With improving earnings estimates, the stock is witnessing a positive investor perception. 

The stock delivered a trailing four-quarter average earnings surprise of 7.8%. It has a VGM Score of A. Qualcomm currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Riding on a robust earnings surprise history and favorable Zacks Rank, it appears primed for further price appreciation. Hence, investors are likely to profit if they bet on this high-flying stock now.

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