Qualcomm May Have Lost Apple, But It's Not Losing Steam: Analyst
Qualcomm Inc (QCOM) is expected to report strong revenue and earnings for Q3, with analyst Samik Chatterjee from JPMorgan maintaining an Overweight rating and raising the price target from $190 to $200. Despite losing Apple as a client, Qualcomm's diversified strategy is anticipated to support revenue growth, particularly in the high-end smartphone market. Investor expectations are low due to weak sales data, but positive guidance for Q4 may surprise investors. Qualcomm shares rose 1.50% to $160.77.
Qualcomm Inc QCOM is likely to report upbeat revenue and earnings for the fiscal third quarter, with "upsides across the board," according to JPMorgan.
The Qualcomm Analyst: Analyst Samik Chatterjee reiterated an Overweight rating, while raising the price target from $190 to $200.
The Qualcomm Thesis: While the company is gearing up to report results against a low bar, its guidance for the fiscal fourth quarter "is likely to surprise investors positively," Chatterjee said in the note.
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Investor expectations are low due to the weak monthly sales data reported by MediaTek Inc MDTTF, muted smartphone sales growth in the second quarter, and the impact of the share loss at Apple Inc AAPL, the analyst stated.
Despite the loss of Apple revenues, the resilience of Qualcomm's revenue outlook would highlight the success of its diversification strategy, with "new efforts around expansion into the Datacenter TAM likely to provide further legs to the non-Smartphone growth drivers in time," he wrote.
In the smartphone market, the high-end range is likely to have performed better, which would help Qualcomm generate low double-digit revenue growth in the fiscal third and fourth quarters, he added.
Price Action: Shares of Qualcomm had risen by 1.50% to $160.77 at the time of publication on Monday.
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