By Stephen Nellis and Arsheeya Bajwa
SAN FRANCISCO (Reuters) -Chip designer Qualcomm on Wednesday forecast quarterly gross sales and revenue above market expectations as premium smartphone gross sales rebounded, however a doable lack of enterprise subsequent 12 months from Samsung, a key buyer, despatched its shares down after hours.
Qualcomm is among the many world’s greatest suppliers of modem chips that join smartphones to wi-fi knowledge networks. For the present fiscal first quarter ending in December, Qualcomm mentioned it expects gross sales and adjusted revenue with a midpoint of $12.2 billion and $3.40 per share, above analyst estimates of $11.62 billion and $3.31 per share, in line with LSEG knowledge.
For Samsung Electronics’ most up-to-date Galaxy S25 fashions, Qualcomm equipped 100% of modem chips, however Qualcomm CEO Cristiano Amon advised Reuters on Wednesday that Qualcomm was ready for a decrease share in Samsung’s subsequent technology.
“When you concentrate on Galaxy S26, we’re planning for 75% – that is what we count on,” Amon mentioned.
Qualcomm shares fell 2.7% in prolonged buying and selling on Wednesday. The inventory had risen practically 4% throughout common buying and selling.
The corporate has been increasing into different fields resembling laptops and cars, in addition to knowledge heart chips, after longtime buyer Apple has deliberate to considerably transition to its personal modems.
Amon advised analysts on a convention name on Wednesday that the corporate was in discussions with a big AI computing firm to provide chips.
He advised Reuters that the forecast and better-than-expected fourth-quarter outcomes had been pushed by a wave of customers upgrading midpriced smartphones to costlier gadgets to deal with AI apps, with the market starting to divide between low-end gadgets and the pricier premium gadgets.
“You do not have something within the center,” he mentioned. “And that is sort of a world phenomenon that is occurring in China, that is occurring in India. We proceed to see an enlargement of the premium tier.”
Buyers have been working to grasp how Apple’s transition to its personal modems will have an effect on Qualcomm’s enterprise. In a word to shoppers, Bernstein analyst Stacy Rasgon mentioned Apple is probably going utilizing its personal chips in its iPhone Air and iPhone 16e fashions however has remained with Qualcomm chips for iPhone 17 fashions, softening the blow to Qualcomm.
Apple, Samsung and China’s Xiaomi all nonetheless account for greater than 10% of Qualcomm’s income, Qualcomm mentioned in securities filings on Wednesday.
DISCUSSIONS WITH HYPERSCALER
Qualcomm final month introduced a brand new collection of AI knowledge heart chips, saying that Humain, an AI agency based by Saudi Arabia’s sovereign wealth fund, shall be a buyer. Amon mentioned on the convention name that Qualcomm is in discussions with one other giant buyer.