Qualcomm beats analysts' estimates… but falls on the stock market

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Qualcomm has shared its financial results for the first fiscal quarter, which covers the period from October to December. The chip giant continues its momentum and exceeds Wall Street analysts' expectations but nevertheless falls on the stock market.

Smartphones on the rise

The company's turnover has seen a nice increase of 17% to reach 11.7 billion dollars. Its net profit increased by 15% to $3.18 billion. This performance was driven by its QCT division, dedicated to selling chips, which saw its profit climb by 20% to $10.1 billion.

Its smartphone branch also recorded encouraging results. In addition to a sharp increase in demand from Chinese manufacturers for high-end devices, Qualcomm benefited from the marketing of Samsung's latest Galaxy phones, which exclusively use its semiconductors. Smartphones generated $7.57 billion for the company, up 13% year over year.

But Qualcomm’s fastest-growing unit isn’t necessarily the one you’d expect, since it’s the automotive business. It’s a sector where the company is looking to grab market share, just like the PC business with its partnership with Microsoft. And it’s been a success so far: its automotive operations have raked in $961 million, a whopping 61% increase.

© Qualcomm

A word for DeepSeek

Another cornerstone of Qualcomm's business is the royalties it receives on patents that cover how smartphones connect to networks. They brought in $1.54 billion in the quarter. That's almost the same amount as the IoT division, which includes low-power chips for industrial use as well as those that equip Meta's smart glasses and Copilot+ PCs.

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« Snapdragon-based Ray-Ban Meta glasses continue to exceed expectations by adopting more AI features. We remain optimistic that we are at the beginning of an inflection point for smart glasses, which will gain momentum as they become more wearable,” predicts Qualcomm CEO Cristiano Amon. The division saw its profits grow 26% to $1.55 billion.

The executive also took the opportunity to praise DeepSeek, the Chinese startup that is shaking up the AI ​​ecosystem. «DeepSeek R1 and other similar models have recently demonstrated that AI models are growing faster, getting smaller, more capable and more efficient, and are now able to run directly on the device ,” he explained.

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Gloomy outlook for 2025

Despite its commendable results, Qualcomm saw its share price fall by 4%. Indeed, the manufacturer predicted little to no growth for the whole of 2025. Enough to worry investors, who see in these estimates gloomy prospects for the smartphone industry.

At the same time, Qualcomm is preparing to generate less revenue with Apple. If the brand with the apple continues to use its modem chips, a home-made successor should soon see the light of day, causing the company to lose one of its biggest customers.

• Qualcomm saw its revenue climb 17% in the October-December period.
• The company has seen significant growth in sectors it sees as key to its future, such as automobiles and PCs.
• Still, it expects almost no growth in 2025.

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