Qualcomm spikes despite poor forecast, citing progress with “leading hyperscaler” and an imminent return to growth in China
Qualcomm, a chip company seemingly left behind in AI, is trying to lean in more to the boom.
Qualcomm is soaring in postmarket trading on solid but unspectacular Q2 results and a downright disappointing Q3 sales forecast.
The chip company, long on the outskirts of the AI and data center trade, is looking to make a more aggressive foray into the space.
In its press release, President and CEO Cristiano Amon touted the company’s entry into the data center business, with initial shipments to a “leading hyperscaler” on track for later this year, and said at its Investor Day on June 24 that investors could expect more on Qualcomm’s growth plans in data center and physical AI.
To kick off the conference call, Amon said that the company boasted “the world’s best-performing CPU,” which will be prized in agentic AI workloads.
“We’re a step-function increase in strategic customer engagements, and it’s changing how we think about the broad AI opportunity, as well as the speed of our diversification efforts,” he added.
While Qualcomm’s handset business has been under acute pressure in light of the limited supply of memory chips, management is calling for a positive inflection in China, its most important market, the following quarter.
Revenues tied to Chinese smartphone customers “will reach a bottom” this quarter before returning to growth, per Qualcomm’s guidance.
Speaking of growth initiatives, one analyst has suggested that Qualcomm will play a role in an AI agent phone being developed by OpenAI, which may be a potentially fertile line of questioning during the upcoming conference call.
The stock, long overshadowed in the semiconductor space by its peers more tied to the AI boom or with surging memory chip prices working for rather than against them, has been on a tear as of late.
In Q2, adjusted earnings per share of $2.65 for the period ended March 29 exceeded Wall Street’s call for $2.55, while revenues of $10.6 billion were virtually bang in line with consensus estimates. For the current quarter, management’s sales guidance of $9.2 billion to $10.2 billion fell short of the consensus $10.3 billion projection.
