Qualcomm Announces Stock Buybacks and Dividend Increase
(Bloomberg) — Qualcomm, recognized as the leading smartphone processor, is set to embark on an additional $20 billion stock buyback initiative while also increasing its quarterly cash dividend. This move is part of a broader strategy to enhance shareholder returns and diversify its business operations.
The company’s board has approved a new share repurchase program, complementing a prior buyback announced in November 2024. Starting March 26, the San Diego-based firm will raise its quarterly dividend from 89 cents to 92 cents per share, leading to an annual dividend increase to $3.68 per share.
In recent developments, Qualcomm issued cautious sales forecasts, citing that a global memory chip shortage might compel some customers, particularly in China, to scale back their smartphone manufacturing. CEO Cristiano Amon aims to shift the company towards being a more varied seller of chips for different applications like automotive, computing, and data centers; however, the new ventures haven’t yet sufficiently offset declines in key markets.
As of 9:41 a.m. New York time, Qualcomm’s shares rose about 3%.
Amon emphasized that the company is “focused on returning profits to our shareholders and executing on continued diversification opportunities” in a statement released on Tuesday.
Big tech firms are increasingly purchasing memory chips to meet the demands of their artificial intelligence systems. This trend has prompted chip manufacturers to prioritize higher-margin orders, subsequently reducing the supply of memory chips available for sectors like consumer electronics and automotive. Consequently, prices for some memory products have surged significantly.
Qualcomm is aiming to break into the promising market for AI data center components. Late last year, the company announced a new product intended to rival Nvidia’s market dominance, with initial shipments expected next year. Humain, an AI startup backed by the Saudi government, will reportedly be the company’s first customer.
