Qualcomm Stock Jumps Pre-Market After Earnings Beat And Price-Target Hikes: Retail Optimistic

Qualcomm ($QCOM) shares jumped nearly 6% in pre-market Thursday following a fourth-quarter earnings beat and a new $15 billion share buyback program.

The chip maker's stock had already gained over 4% on Wednesday,  investors anticipated positive results ahead of the earnings release.

Qualcomm reported earnings of $2.69 per share, surpassing Wall Street’s consensus estimate of $2.56. Revenue also exceeded expectations, coming in at $10.24 billion, beating the forecasted $9.9 billion.

UBS analyst Timothy Arcuri raised Qualcomm’s price target to $190 from $185, maintaining a ‘Neutral’ rating after the earnings report.

He highlighted the company's strong guidance at $10.9 billion for the next quarter, particularly its optimistic outlook for the premium segment of the China market, driven by the launch of the Snapdragon 8 Elite. 

Wells Fargo analyst Aaron Rakers also raised Qualcomm’s price target, increasing it from $170 to $175. However, he maintains an ‘Underweight’ rating, citing concerns about increasing competition in AI PCs, issues with Apple’s 5G modem, and the ongoing licensing dispute with Arm Holdings ($ARM).

Qualcomm is currently locked in a legal battle with Arm over its use of Arm’s chip designs following the acquisition of Nuvia, which could impact Qualcomm’s ability to produce processors for Android smartphones and hurt its revenue.

Reports also suggest that Apple ($AAPL) is moving to reduce its reliance on Qualcomm’s 5G chips for its iPhones. Apple has been working on its own 5G chip designs since 2019 and may soon incorporate them into the upcoming iPhone models.

JPMorgan analyst Samik Chatterjee raised Qualcomm’s price target to $200 from $195, keeping an ‘Overweight’ rating. 

Chatterjee's rating is based on Qualcomm’s better-than-expected revenue and margins, with a particular focus on Qualcomm's performance in the Internet of Things (IoT) and automotive sectors. 

The company’s IoT chip revenue reached $1.7 billion, up 22% year-over-year (YoY). The automotive chip segment also performed well, growing 68% compared to last year, to $899 million.

Qualcomm’s smartphone chip revenue, which remains its core business, totaled $6.1 billion, in line with expectations and up 12% compared to the previous year.

“We’re really focused on executing on our growth and diversification,” said CEO Cristiano Amon on the earnings call.

Charterjee expects Qualcomm’s upcoming investor day to shed light on its long-term market diversification, further supporting growth potential.

Retail sentiment on Stocktwits is largely optimistic, with investors expecting Qualcomm to maintain its pre-market gains and potentially continue its upward momentum.

Qualcomm’s stock has gained 30% so far this year. 

For updates and corrections email newsroom@stocktwits.com.

Read more: Arm Shares Rise Pre-Earnings, But Retail Worries Stock May Be Overvalued

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