Qualcomm(US:QCOM) Huachuang Securities·2024-08-06 00:31Investment Rating - The report maintains a positive outlook on Qualcomm, projecting revenue growth and strong performance in various segments, particularly in automotive and mobile chip businesses [2][19][29]. Core Insights - Qualcomm's Q2 FY2024 performance exceeded expectations, driven by smartphone chip sales, with revenue reaching $9.4 billion, a year-over-year increase of 11% [3][7]. - The automotive chip segment achieved record revenue for four consecutive quarters, with a 87% year-over-year increase, and the company anticipates automotive revenue to reach $4 billion by 2026 [3][11][30]. - The IoT business showed signs of recovery, with revenue of $1.4 billion, down 8% year-over-year, but expected to benefit from AI PC and XR growth [3][19][27]. - Qualcomm expects Q3 FY2024 revenue to be between $9.5 billion and $10.3 billion, with adjusted EPS projected at $2.45 to $2.65, reflecting a year-over-year increase of 25% to 35% [19][21]. Revenue and Profitability - In Q2 FY2024, Qualcomm reported revenue of $9.4 billion and net income of $2.13 billion, with an EPS of $1.88, marking an 18% increase year-over-year [3][7][28]. - The QCT segment (Qualcomm CDMA Technologies) generated $8.1 billion in revenue, with a gross margin of 27%, driven by growth in automotive and IoT sectors [9][28]. - The QTL segment (Qualcomm Technology Licensing) reported revenue of $1.3 billion, with a gross margin of 70%, aligning with expectations [12][28]. Business Segment Performance - The smartphone business generated $5.9 billion in revenue, reflecting a 12% year-over-year increase, supported by strong sales in high-end Android devices [10][28]. - The automotive business reached $811 million in revenue, marking a significant increase and showcasing Qualcomm's commitment to this sector [11][30]. - The IoT segment's revenue was $1.4 billion, indicating a slowdown but with expectations for recovery driven by AI applications [3][19][27]. Future Guidance - Qualcomm anticipates Q3 FY2024 revenue between $9.5 billion and $10.3 billion, with adjusted EPS of $2.45 to $2.65, indicating strong growth prospects [19][21]. - The company projects QCT revenue for Q3 FY2024 to be between $8.1 billion and $8.7 billion, with growth in mobile and IoT sectors expected [20][29]. - For the fiscal year 2024, Qualcomm expects a revenue increase of approximately 50% and an operating expense of around $2.2 billion [23][29].