The Qualcomm Conundrum: Unpacking Q1 Fiscal 2024 Earnings The Qualcomm Conundrum: Unpacking Q1 Fiscal 2024 Earnings

By: Alex Freidmen

Qualcomm Incorporated QCOM is set to unveil its first-quarter fiscal 2024 results on Jan 31 post-market closure. Over the preceding four quarters, the San Diego, CA-based company has outperformed with an average earnings surprise of 2.23%. It’s poised for year-over-year top-line expansion, propelled by the insatiable demand for Snapdragon chipsets and the dawn of cutting-edge AI-native solutions.

The Unveiling of Future-Inspired Technologies

During the quarter, Qualcomm thrust the next-gen Snapdragon platforms into the limelight, designed expressly for advanced generative AI devices and applications. Of noteworthy mention is the Snapdragon 8 Gen 3, flaunting the mightiest NPU (Neural Processing Unit) for mobile gadgets. Through AI, it profoundly amplifies the visual, gaming, sonic, content creation, and connectivity experiences for top-tier smartphones.

Not to be outdone, the Snapdragon X Elite, a fusion of the industry’s foremost NPU and unparalleled CPU prowess, bears testament to unyielding efficiency in executing generative AI tasks and marked stability, making it an impeccable fit for Windows 11 PCs. These new introductions are likely to have significantly bolstered revenues during the quarter.

In addition, Qualcomm unveiled the state-of-the-art Snapdragon 7 Gen 3 chipsets, accentuating advanced AI features for mid-range smartphones. Owing to its premium features, the product has piqued the interest of major manufacturers, with HONOR and VIVO, two eminent Chinese smartphone makers, leading the charge to incorporate the chipsets into their offerings. Qualcomm’s X35 5G Modem-RF System has also been gaining impressive traction, driven by the spiraling demand for 5G RedCap devices. These pivotal developments are anticipated to cast a favorable glow over the company’s first-quarter results.

Our revenue estimate for the QCT segment stands at $8.05 billion, underscoring a year-over-year uptick of 2.1%, while the projection for the QTL segment lingers at $1.35 billion, marking an 11% descent.

For the December quarter, the Zacks Consensus Estimate for revenues is perched at $9.5 billion, pointing toward an upswing from the year-ago figure of $9.45 billion. Adjusted earnings per share stand at $2.38, hinting at a marginal uptick from $2.37 in the year-ago quarter.

Insights into Earnings Expectations

Our trusted model foreshadows a probable earnings beat for Qualcomm in this round. The combination of a favorable Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) augurs well for an earnings beat. This is precisely the scenario at play here.

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Earnings ESP: The Earnings ESP, emblematic of the variance between the Most Accurate Estimate and the Zacks Consensus Estimate, stands at +3.45%. The Most Accurate Estimate pins down at $2.46, while the Zacks Consensus Estimate steadies at $2.38.

Market Competition and Other Avenues to Explore

The current Zacks Rank for Qualcomm is #3.

Exploring Alternatives

Apart from Qualcomm, other companies lining up for a potential earnings beat this season based on our model are:

InterDigital, Inc. IDCC is gearing up to disclose its quarterly numbers on Feb 15, armed with an Earnings ESP of +1.93% and a Zacks Rank #1. Discover the full roster of today’s Zacks #1 Rank stocks here.

NVIDIA Corporation NVDA, flaunting an Earnings ESP of +3.68% and sporting a Zacks Rank of 2, is slated to report quarterly numbers on Feb 21.

Meta Platforms, Inc. META boasts an Earnings ESP of +0.79% and carries a Zacks Rank of 2. It is scheduled to release its quarterly numbers on Feb 1.

Monitor upcoming earnings releases using the Zacks Earnings Calendar.

Parting Words

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