Qualcomm (QCOM) stock fell out of the gate Thursday even as the integrated circuits specialist beat top- and bottom-line expectations for its fiscal 2025 first quarter and issued a better-than-expected forecast for its fiscal second quarter.
In the three months ending December 29, Qualcomm's revenue increased 17.5% year over year to $11.7 billion. Its earnings per share (EPS) rose 24% from the year-ago period to $3.41.
"We are very pleased to have achieved quarterly revenue records, which reflect the strength of our technology, product roadmap and end-customer demand," said Qualcomm CEO Cristiano Amon in a statement. "We are delivering growth across our diversification initiatives and remain committed to executing on our fiscal 2029 targets to achieve $22 billion of non-handset revenues."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results handily beat analysts' expectations. Wall Street was anticipating revenue of $10.9 billion and earnings of $2.96 per share, according to CNBC.
For the second quarter of this fiscal year, Qualcomm expects to achieve revenue in the range of $10.2 billion to $11 billion and earnings between $2.70 to $2.90 per share. The midpoints of these ranges, revenue of $10.6 billion and earnings of $2.80 per share, came in ahead of the $10.3 billion in revenue and earnings of $2.69 per share that analysts are anticipating.
As for why the tech stock is falling, some media outlets are reporting to disappointing licensing revenue of $1.54 billion, which came in slightly below what Wall Street was expecting.
Where does Qualcomm stand with analysts?
Qualcomm has tracked the performance of the broader market over the past 12 months, up 24.5% on a total return basis (price change plus dividends) vs the S&P 500's 24.3% gain. And Wall Street sees even more upside for the semiconductor stock.
According to S&P Global Market Intelligence, the average analyst target price for QCOM stock is $202.12, representing implied upside of more than 20% to current levels. Additionally, the consensus recommendation is a Buy.
However, not everyone is so upbeat toward the large-cap stock. Financial services firm Oppenheimer, for one, has a Perform rating (equivalent to a Hold) on QCOM.
"While we recognize QCOM's leading position in modem and single-chip integrated chipset solutions, we believe the company is over-exposed to the mobile market, with its diminishing growth and increasing competition," says Oppenheimer analyst Rick Shafer. "We believe both sides of the business face structural issues with no clear solution in sight. The stock should remain under pressure until it is able to diversify toward stickier, more profitable markets."
Related Content
-
What Trump’s 'Big Beautiful Bill' Means for Your Utility BillsIf passed, the 'Big Beautiful Bill' could make home energy upgrades more expensive and raise monthly costs. Here's how much more you might pay and how to prepare.
-
What Boomers and Gen Xers Can Learn from Younger ColleaguesWhether you're Gen X or a baby boomer, your younger colleagues' opinions on work may help you find a new job or be happier in the one you've got.
-
Eight Estate Planning Steps to Protect Your Loved Ones (and Your Legacy)Two-thirds of Americans don't have an estate plan. If you're one of them, these are the essential steps to take now to prevent problems for your family later.
-
The Six Pros This Adviser Says You Need to Sell Your BusinessSelling your business isn't as simple as getting the best price and walking away. These are the six professionals you'll need to get a deal across the finish line.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build WealthConsistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key PiecesIf retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
After the Disaster: An Expert's Guide to Deciding Whether to Rebuild or RelocateHomeowners hit by disaster must weigh the emotional desire to rebuild against the financial realities of insurance coverage, unexpected costs and future risk.
-
A Financial Expert's Tips for Lending Money to Family and FriendsWhat starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.
-
Stock Market Today: Good Feelings and Solid Data Lift StocksResilience and de-escalation defined another generally positive day for financial markets.
