Qualcomm Incorporated (NASDAQ:QCOM) saw a decline in its stock during after-hours trading on Wednesday. This dip came despite a fourth-quarter guidance that raised concerns about demand in end markets. The shares dropped by 4.1%, even though chipmakers reported better-than-expected revenues, which left some investors feeling disappointed.
For the quarter ending June 29, Qualcomm posted non-GAAP earnings of $2.77 per share, beating the consensus prediction of $2.71. Additionally, revenues grew by 10% year-over-year to reach $10.37 billion, marginally surpassing Wall Street’s expectation of $10.33 billion.
Qualcomm’s primary chip business, Qualcomm CDMA Technologies (QCT), generated sales of $8.99 billion, an 11% increase compared to the previous year. There was a noticeable rise in mobile phone-related sales, which grew by 7% to $6.333 billion. Meanwhile, the automotive segment saw a 21% increase year-on-year, and IoT revenue climbed by 24%, amounting to $1.68 billion.
“If we see more growth in QCT Automotive and IoT revenues, it will bolster our confidence in meeting our diversification strategy and long-term revenue goals,” remarked Cristiano Amon, Qualcomm’s president and CEO. He also emphasized the company’s leadership in AI processing, advanced connectivity, and low-power computing, claiming that as AI technology scales, it will serve as a key platform within the industry.
The report points to Qualcomm’s efforts to diversify amidst challenges in the traditional handset market. Currently, sectors like automotive and IoT account for nearly 30% of QCT sales, with the automotive sector continuing to adopt Snapdragon-based digital cockpit solutions and rising Advanced Driver Assistance Systems (ADAS).
Despite a strong performance in the recent quarter, investors seem wary about Qualcomm’s projected figures for the final quarter of 2025. The company anticipates revenues between $10.3 billion and $11.1 billion, roughly aligning with analyst predictions of $10.6 billion at the midpoint. The expected EPS range of $2.75 to $2.95 also aligns closely with the consensus estimate of $2.82.
