Qualcomm (NASDAQ:QCOM) recently delivered better-than-expected quarterly results, with shares of the semiconductor manufacturer gaining 21% over the past six months.
Strong results were driven mainly by Qualcomm's position in the Chinese Android handset market and a broader shift to higher-end 5G smartphones. The robust demand helped revenues increase 30% year-over-year to $10.70 billion, while earnings per share at $3.23 signaled 49% year-over-year growth.
QCT, Qualcomm's chip business, reported $8.85 billion in sales, up 35% from the same quarter a year earlier. Growth, however, slowed from the 63% it reported previously.
Breaking its chip division into four categories, all of which rose during the quarter, CEO Cristiano Amon said Qualcomm's supply was improving during a global shortage of microchips. The increase in revenue was largely driven by a 42% rise in handset chip sales to $5.98 billion.
After initially climbing higher following the company's report of its eighth-straight earnings beat, shares of Qualcomm are now sliding as the company's apprehension to provide FY22 guidance doesn't seem to sit well with investors. With many investors expecting supply constraints to continue throughout 2022, it is likely that QCOM is hedging against the possibility that launches might be delayed.
However, Qualcomm benefits from multiple themes like 5G, industrial automation, and a global uptake in mobile phones and thus, remains an excellent choice for buy-and-hold investors, with recent pullbacks creating a good entry point.
ABOUT QUALCOMM
Qualcomm Incorporated is a wireless technology company that engages in the development, launch, and expansion of technologies like fifth-generation (5G).
Analyst Kevin Cassidy at Rosenblatt recently reiterated a Buy rating on Qualcomm stock with a $225 price target, implying an upside potential of 19.55% to current levels. Consensus among analysts is a Moderate Buy based on 11 Buys and 8 Holds with an average price target of $199.18.
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