Benzingaยท2025-11-05 06:18Core Insights - Qualcomm Inc. is expected to report strong third-quarter earnings, primarily driven by its robust 5G handset business, despite concerns regarding the timeline for monetizing its investments in artificial intelligence [1][6]. Business Performance - The company has provided guidance for Q3, forecasting total revenue between $9.9 billion and $10.7 billion, with non-GAAP earnings per share expected to be between $2.60 and $2.80 [6]. - Qualcomm anticipates a 10% year-over-year growth in QCT handset revenue, with Automotive and IoT segments projected to grow by 20% and 15%, respectively [7]. AI Strategy and Market Perception - Analysts express skepticism about Qualcomm's AI initiatives, with some valuing its AI data center efforts as "option value" not yet reflected in financial models [3][4]. - The market's focus has shifted towards AI, with analysts urging patience as Qualcomm's AI chip, aimed to compete with Nvidia, is not yet monetized [2][3]. Long-term Growth Potential - Qualcomm's long-term potential extends beyond handsets, with key technologies like the Nuvia acquisition forming the basis for its Snapdragon PC platform, which can be utilized for data center chips [5]. - The company is also seen as having emerging roles in physical AI, robotics, and autonomy, which are expected to be significant growth drivers [5]. Stock Performance - Qualcomm's stock has underperformed compared to the Nasdaq 100 index, with a year-to-date increase of 12.50%, compared to the Nasdaq's 21.26% gain [8].