Qualcomm Incorporated (QCOM) shares rose over 11% in pre-market trading after the firm posted its fiscal Q2 results, as investors reacted to a mix of solid results and signs that key markets may soon stabilize.
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The stock move comes after a $10.6 billion revenue print and non-GAAP earnings per share of $2.65, which came in at the high end of guidance. While the report was not strong across all segments, it offered enough support to shift near-term sentiment.
Earnings Show Stability with Early Growth Signals
Qualcomm said its core chip unit, QCT, brought in $9.1 billion in revenue, while its licensing unit added $1.4 billion. Margins also held firm, with QCT at about 27% and QTL at about 72%.
At the same time, the firm pointed to strong progress in newer areas. Automotive revenue rose 38% year-over-year to $1.3 billion, while IoT revenue grew 9% to $1.7 billion. Together, these segments rose about 20% and show that the firm is moving beyond its core handset base.
In addition, Qualcomm said it returned $3.7 billion to holders through buybacks and dividends, which adds support to the stock.
Outlook and AI Efforts in Focus
Looking ahead, the firm gave a softer near-term outlook. Qualcomm guided Q3 revenue to a range of $9.2 billion to $10.0 billion and earnings per share of $2.10 to $2.30. The firm said weak demand in China and supply issues tied to memory are still weighing on handset sales.
However, the tone on the call pointed to a possible turn. Management said that China handset demand should “bottom in Q3 with sequential recovery thereafter,” which helped lift sentiment.
At the same time, Qualcomm pointed to new growth paths tied to AI and custom silicon. The firm said it expects to begin shipments for a custom chip deal with a major cloud firm in the December quarter. It also noted strong early traction in its PC and edge platforms.
Taken together, the report signals that while near-term growth may stay under pressure, investors are starting to look ahead to a more stable demand base and new AI-driven revenue streams.
Is QCOM Stock a Good Buy Now?
Turning to the Street, Qualcomm has a Hold consensus, based on 30 analysts’ ratings. The average QCOM stock price target is $159.03, implying a 1.94% upside from the current price.
