Qualcomm, a leading semiconductor and telecommunications equipment company, has provided a better-than-expected revenue forecast as it focuses on AI-powered smartphones. The company’s fiscal second-quarter earnings exceeded Wall Street’s expectations, leading to a 4% rise in shares during extended trading.
During the quarter ended March 24, Qualcomm reported adjusted earnings per share of $2.44 compared to the expected $2.32, and adjusted revenue of $9.39 billion versus the expected $9.34 billion. Net income for the quarter was $2.33 billion, or $2.06 per share, showing significant growth from the previous year.
For the current quarter, Qualcomm anticipates sales between $8.8 billion and $9.6 billion, higher than the $9.05 billion expected by Wall Street. The company’s handset sales increased by 1% year over year to $6.18 billion, indicating a potential recovery in the smartphone market following the post-Covid slump.
Qualcomm attributed this growth to the strong demand for ‘premium tier’ or ‘AI-powered’ smartphones that require advanced chips. The company highlighted a 40% revenue increase from Chinese phone makers, emphasizing the popularity of premium devices in China, particularly from brands like Oppo, OnePlus, and Vivo.
CEO Cristiano Amon stated that Qualcomm has observed no weakness in the Android premium market in China and emphasized the importance of premium devices utilizing their best chips. These ‘AI-powered smartphones’ offer features such as generative email completion, live translation, and virtual assistants that leverage the chips’ specialized ‘NPU’ AI section.
Despite an expected decline in overall handset revenues during the current quarter due to the absence of summer smartphone launches, Qualcomm remains optimistic about its future performance. The company’s strong financial results and positive outlook reflect its position as a key player in the semiconductor industry, particularly in the smartphone market.
