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Qualcomm Inc. (QCOM) is a semiconductor company that designs, develops, and markets wireless telecommunication products, integrated circuit systems, and system software. Its list of offerings includes radio frequency transceivers, cellular modems, application processors, consumer wireless devices, and wireless connectivity integrated circuits. Its products are used in mobile phones, tablets, laptops, cameras, wireless devices and network infrastructure equipment, music and voice gateway, IoT devices, and more.
The company is spread across Brazil, Germany, Japan, Taiwan, South Korea, China, and the United States of America with its headquarters also in the U.S. in San Diego, California.
Qualcomm’s stock has seen a modest 28% gain this year even extending to 64% in June before falling off from its 52-week high.
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Qualcomm Reports Solid Results
In May, the company reported its Q2 results which were in line with analysts and caused the stock to pop 9.74% on the day. They reported a revenue of $9.39 billion against analyst’s $9.35 billion estimate while EPS came at $2.44 also beating Wall Street’s $2.32 expectations. Its gross margin for the quarter came to 56.3% improving from 55.2% posted same quarter last year.
The company significantly improved its free cash flow as it totaled $3.37 billion seeing a 23.2% increase YoY.
Management has revenue guidance in the range of $8.8 billion to $9.6 billion translating to a midpoint of $9.2 billion for Q3 which is above analyst’s $9.02 billion estimate.
Qualcomm is scheduled to publish its third-quarter results on July 31 with analysts estimating revenue of $9.19 billion with earnings of $2.25 per share.
Qualcomm Gets A BUY Rating
Analysts are optimistic about the stock as indicated by a consensus “Moderate Buy” rating and a mean price target of $206.45 implying an upside of 15.68% from current levels. Recently the semiconductor stock received a “BUY” rating from research firm Baird with a raised price target from $200 to $250 signifying an upside potential of 40% from current price levels.
Baird analyst Tristan Gerra noted the strong demand for the company’s handset business with the rise of AI as he pointed towards more than 90M procurement units for Apple’s @APPL upcoming iPhone 16 which is a 10M boost from last year as it looks to introduce AI in its devices.
The analyst also pointed towards the “strong response” towards Qualcomm’s Snapdragon X Elite PC chips in South Korea with big companies like HP, Dell, Samsung, Microsoft and Lenovo already launching Copilot+ PCs.
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All in all, there are 29 analysts covering the stock with 17 having a “Strong Buy” rating, 1 with a “Moderate Buy” rating, 10 with a “Hold” rating, and 1 with a “Strong Sell” rating.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.