Qualcomm's stock prices drop following lackluster revenue predictions
Reimagined Dispatch:
Bloomberg
Smartphone chip maker giant, Qualcomm Inc, took a hit in early trading yesterday, as it heard a tepid revenue callout, raising concerns that trade woes may dent its product demand.
Expecting a revenue haul ranging from $9.9 billion to $10.7 billion in the June quarter, Qualcomm noted in a Wednesday statement, with the midpoint of that range slightly shy of the average analyst estimate of $10.33 billion.
The somber forecast rekindled fears that smartphone markets might suffer a blow from an impending trade spat. With Qualcomm reputed as highly susceptible to tariff consequences, the warning bells are ringing loud.
China, the golden goose for Qualcomm chips, boasts a flock of the company's top clients.
Commenting on the looming macroeconomic and trade climate, Qualcomm CEO Cristiano Amon stated, "We stay committed to controlling our technology advancements, superior product range, solid client relationships, and operational efficiency."
The shares dove more than 5 percent in premarket trading in New York yesterday, post the announcement.
Though Qualcomm hasn't witnessed any severe tariff repercussions yet, and Chinese customers continue to design products with Qualcomm chips, Amon explained in a call with analysts, there remains uncertainty about the indirect impact of tariffs.
Qualcomm's Q2 earnings, approximately $2.70 a share, were announced excluding certain items. This compares to an estimated $2.64 by Wall Street. Comparatively, in the March quarter, profit reached $2.85 a share, excluding certain items, and revenue skyrocketed 17 percent to $11 billion. Market forecasters had predicted earnings of $2.81 a share and revenue of $10.6 billion.
Phone-related revenue amounted to $6.93 billion, just above the projected $6.8 billion. Revenue for vehicle chips stood at $959 million. Connected-device semiconductor sales grasped $1.58 billion.
Qualcomm supplies processors and modems that power the most sophisticated smartphones worldwide, even though the growth pace isn't as exhilarating as before. The company's products dominate high-end Android phones.
Under Amon's leadership, Qualcomm has been pursuing a strategy to lessen its smartphone market dependency, exploring new grounds such as offering chips to carmakers and championing new processors as the foundation for AI laptops.
Recently celebrating strong fiscal Q2 2025 results, Qualcomm recorded a 16.9% revenue surge year-over-year, reaching $10.98 billion, and a 22.6% increase in EPS, to $2.55[1][2][3]. Despite such success, trade war apprehensions and macroeconomic uncertainties loom over the company. The current revenue predictions for Qualcomm's third quarter include a range from $9.9 billion to $10.7 billion[1][2][3], with automotive and IoT sectors providing valuable support[1][3]. Qualcomm projects non-GAAP EPS between $2.60 and $2.80 for the same quarter[1][2]. Strategic initiatives in diversification help steer growth while navigating these challenges[3].
- Despite the positive performance in Qualcomm's Q2 2025 results, the company is bracing for macroeconomic uncertainties and trade war apprehensions, as it forecasts a revenue range of $9.9 billion to $10.7 billion for its third quarter.
- As Qualcomm continues to supply processors and modems for high-end Android phones, its pursuit of a strategy to lessen its smartphone market dependency includes exploring new markets such as carmakers and AI laptop processors, following the leadership of CEO Cristiano Amon.
- With trade tensions threatening smartphone markets, Qualcomm's top clients in China, the golden goose for the company's chips, remain a source of concern, as the company hasn't yet experienced significant tariff repercussions but faces uncertainty about indirect impacts.
- In the world of finance, the stocks of smartphone chip maker Qualcomm Inc took a dip in early trading, as investors questioned the company's business operations in light of potential macroeconomic and trade-related challenges, and the somber forecast for the June quarter, which fell slightly below the average analyst estimate.
