Qualcomm Anticipates Higher Revenue Due to Smartphone Chip Demand

Qualcomm Inc., a prominent semiconductor company, is expected to report fourth-quarter revenue that exceeds Wall Street’s forecasts due to strong demand for high-end Android devices and a rise in chips utilized in AI-enabled smartphones. Following this announcement, the company’s shares increased by over 5% in after-hours trading.

Based in San Diego, Qualcomm has projected its fourth-quarter revenue with a midpoint of $9.9 billion, surpassing the average analyst estimate of $9.71 billion. This optimistic outlook comes as the smartphone market experiences a resurgence in demand, particularly for AI-capable devices, which has led to a higher volume of chip orders for the company.

Qualcomm’s CEO, Cristiano Amon, previously mentioned that heightened demand for premium smartphones in China has significantly bolstered the company’s order book. The necessity for advanced semiconductors to support AI features in these smartphones has further intensified this demand.

For the fourth quarter, Qualcomm anticipates adjusted earnings to reach a midpoint of $2.55 per share, exceeding the forecasted $2.45 per share. The company’s chip segment expects sales to hit a midpoint of $8.4 billion, surpassing analyst predictions of $8.33 billion.

Amid this positive outlook, two of Qualcomm’s key customers, Apple and Vivo, continue to hold significant positions in the Chinese smartphone market, which saw a 6% growth during the June quarter, according to research data. Analysts also expect Apple to report a revenue increase in its upcoming fiscal third-quarter results.

Furthermore, Qualcomm’s forecast for fourth-quarter patent-licensing sales is set at a midpoint of $1.45 billion, again above the estimated $1.37 billion. The company’s third-quarter adjusted revenue was reported at $9.39 billion, exceeding the anticipated $9.22 billion. This favorable revenue outlook underscores Qualcomm’s strong market positioning and the heightened demand for its smartphone components, especially as AI technology becomes increasingly essential in mobile devices.

This article was generated with the support of AI and reviewed by an editor.