Qualcomm Reports Earnings Amid Revenue Decline and Strategic Shifts
Qualcomm (QCOM) is set to report fiscal third-quarter results after the market closes on Wednesday, with its stock down nearly 37% from a recent high. Analysts maintain an average price target of $221.23 but have not updated their ratings in response to declining revenue and earnings per share for the previous quarter. The company's handset chip sales dropped by 13%, driven partly by rising memory prices that are squeezing smartphone manufacturers' budgets. Qualcomm has announced double-digit price increases on its chips, effective September 1. The firm also expects a recovery in Chinese customer demand following this quarter and is navigating Apple’s transition to using in-house modems. Despite these challenges, Qualcomm's automotive revenue grew by 38% year-over-year, while IoT revenue increased by 9%. Additionally, the company continues its push into data centers with plans for significant growth through fiscal 2029. Shareholder returns remain strong, including a $20 billion stock repurchase authorization.
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