Qualcomm is set to report their Q4 earnings on Wednesday November 6 after the closing bell.
As Qualcomm prepares to release its Q4 FY2024 earnings, analysts are anticipating a strong performance driven by the company’s diversified revenue streams and strategic initiatives.
WHAT SHOULD TRADERS FOCUS ON?
When monitoring Qualcomm’s earnings, traders and investors should focus on several key areas to gain a comprehensive understanding of the company’s performance and future prospects. Here are the critical aspects to consider:
- Revenue and Earnings Growth: Traders should watch Qualcomm’s QCT and QTL revenue segments, particularly in mobile, automotive, and IoT. Markets will also be paying close attention to the company’s EPS and how it measures up to analyst expectations, as it reflects their core semiconductor business performance.
- 5G and Smartphone Demand: Qualcomm’s revenue is tied to smartphone and 5G demand, with a presence in both iOS and Android ecosystems. Growth in 5G adoption rates is especially important given its modem supply to these markets.
- Automotive and IoT Expansion: Qualcomm is diversifying with growth in automotive tech and IoT, which are less dependent on smartphones. Revenue from these newer segments can indicate successful expansion efforts.
- Licensing and Legal Updates: Qualcomm’s QTL licensing arm has faced legal challenges; any updates on key licensing agreements, especially with major players, or royalty rate disputes could impact stability.
- Supply Chain and Chip Shortages: Semiconductor shortages have affected Qualcomm’s production. Insights into supply chain management and chip availability will highlight their resilience or vulnerabilities in meeting demand.
- Guidance and Market Outlook: Forward guidance is essential for understanding Qualcomm’s expectations on 5G demand, smartphone trends, and economic impacts, which can shape market sentiment.
- R&D and Innovation: Qualcomm’s investments in R&D for AI, machine learning, and edge computing show its focus on next-gen tech. New product developments could strengthen its market position in the evolving tech landscape.
MARKET EXPECTATIONS
Earnings per Share (EPS): $2.57
Revenue: $9.93 bn
Qualcomm Inc has recently made headlines with significant developments that impact its market position and investor sentiment. One of the most notable announcements was from Arm Holdings, which decided to cancel Qualcomm’s license to use its intellectual property for chip design, issuing a 60-day notice. Investors and traders are closely watching the implications of this licensing dispute, as Qualcomm relies heavily on such agreements for its semiconductor business.
In contrast, Qualcomm has also unveiled its powerful Snapdragon 8 Elite chip, which is designed to enhance AI capabilities and battery life for Android devices. This launch positions Qualcomm as a formidable competitor against Apple in the smartphone market, tapping into the increasing demand for advanced mobile technology.
Market expectations are high as Qualcomm prepares to release its earnings report. Analysts anticipate strong results, building on the solid performance from previous quarters. Qualcomm’s licensing revenues have consistently provided a stable income stream, and market participants are eager to see how these trends manifest in the forthcoming earnings.
The anticipation surrounding the earnings release is compounded by Qualcomm’s ongoing efforts to diversify its offerings beyond smartphone chipsets, signaling a strategic shift to capture emerging market opportunities. Overall, the market sentiment towards Qualcomm remains cautiously optimistic as stakeholders await the earnings release for insights into future growth trajectories and strategic initiatives.
TECHNICAL ANALYSIS
The stock rebounded from its August 5 low and has been ranging between resistance at $174 and the pivot line at $168. Price formed higher lows and higher highs but is having trouble breaking out of the range. Price is also under the 100 EMA which could also place bearish pressure on the price. Positive earnings could cause a bullish price breakout from its range, where resistance around $185 could come into play. Weak earnings however could lead prices lower toward major support around $156.
