QCOM Stock Rises Premarket: Mystery Cloud Order Overshadows Weak Results, Forecast

• Qualcomm discussed entering the lucrative data center market.
• QCOM posted muted Q2 results and a Q3 forecast.
• Stocktwits sentiment for QCOM, however, climbed higher in the ‘extremely bullish’ zone.

Qualcomm shares gained 12% in the early premarket session after the mobile chipmaker said it had bagged an order from a major cloud company, marking its entry into the lucrative data center market.

The management’s comment about the new order – the company kept the name of the new customer private – came alongside largely dull results and a forecast.

“We now expect initial shipments for a custom silicon engagement at a leading hyperscaler later this calendar year. We look forward to providing an update on our growth initiatives, including opportunities in data center and physical AI at our Investor Day on June 24,” Qualcomm CFO Akash Palkhiwala said on the analyst call.

CEO Cristiano Amon said initial shipments for the order would begin in the fourth quarter. “The only thing I can tell you, it is a large hyperscaler, and we're really thinking about a multi-generation engagement,” he said.

The development marks a shift for Qualcomm: the company gets about two-thirds of its revenue from chips for smartphones, and the rest from chips for automobiles and IoT devices.

QCOM Results Recap

Revenue rose 3% to $10.6 billion, compared with analyst estimates of $10.59 billion. Handset segment sales declined 13%, while the automotive segment sales increased 38%.

Adjusted earnings were $2.65 per share, below the target of $2.56.

For the third quarter, Qualcomm expects revenue between $9.2 billion and $10 billion, missing expectations of $10.19 billion. The profit forecast range of $2.10 to $2.30 was also below expectations of $2.42.

Retail’s View On QCOM

On Stocktwits, the retail sentiment for QCOM shifted higher in the ‘extremely bullish’ zone on Thursday, compared to the previous day.

“$QCOM is the only company that hasn’t been re-rated for it’s AI progress, and I suspect once this peloton company catches the break aways soon we’ll see just how impactful Qualcomm is,” a trader said.

“Every corner of society in every industry will use qualcomm chips in some shape or form. They are affordable, power efficient, and have a proven track record of large scale delivery.”

As of their last close, Qualcomm shares were down 8.2% year to date.

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