Qualcomm could be the best AI stock to own forever.In today's video, I will talk about Qualcomm's (QCOM 4.27%) fourth-quarter earnings report. Watch the short video to learn more, consider subscribing, and click the special offer link below.*Stock prices used were from the trading day of Nov. 6, 2024. The video was published on Nov. 6, 2024. ...

Financial Data and Key Metrics - Non-GAAP revenues for Q4 2024 were $10.2 billion, with non-GAAP earnings per share (EPS) of $2.69 [6] - Chipset business revenues were $8.7 billion, and licensing business revenues were $1.5 billion [6] - QCT handset revenues were $6.1 billion, in line with expectations [20] - QCT IoT revenues increased 24% sequentially to $1.7 billion, driven by new product launches and channel inventory normalization [20] - QCT automotive revenues reached a record $899 million, up 11% sequentially and 68% year-over-year [21] - The company returned $2.2 billion to stockholders, including $1.3 billion in stock repurchases and $947 million in dividends [21] - Full-year fiscal 2024 revenues were $39 billion, with non-GAAP EPS of $10.22, representing 21% year-over-year growth [22] Business Line Performance - Handset revenues grew over 20% year-over-year, driven by premium-tier Snapdragon products and channel inventory normalization [23] - IoT revenues grew sequentially throughout the year, with full-year growth of 55% in automotive, driven by content increases in new vehicle launches [23] - The Snapdragon 8 Elite platform, featuring a second-generation custom Oryon CPU, delivered 30% faster performance with 57% less power [11] - The Snapdragon X Series platforms have expanded to 58 platforms, with strong traction in the PC market [12][38] - The Qualcomm IQ Series was introduced for industrial IoT, offering up to 100 TOPS of on-device AI performance [15] Market Performance - The company expects global 3G, 4G, and 5G handset units to increase by low to mid-single digits year-over-year in calendar 2024 [24] - QCT IoT revenues are expected to grow by more than 20% year-over-year, with growth across consumer, industrial, and networking segments [25] - QCT automotive revenues are forecasted to grow by 50% year-over-year, with flat sequential growth [25] - The company anticipates greater than 40% sequential revenue growth from Chinese OEMs in Q1 fiscal 2025 [24] Strategic Direction and Industry Competition - The company is transitioning from a wireless communications company to a connected computing company for edge AI [6] - Partnerships with Meta, Amazon, and others are driving the transition to AI-enabled edge computing [10] - The Snapdragon 8 Elite platform has been adopted by major OEMs, including Xiaomi, Honor, OPPO, and Vivo, with additional launches expected from Samsung and ASUS [12] - The company is expanding its presence in the automotive market with the Snapdragon Cockpit Elite and Snapdragon Ride Elite platforms, which offer significant AI performance upgrades [17][18] Management Commentary on Operating Environment and Future Outlook - The company remains focused on executing its growth and diversification strategy while maintaining operating discipline [8] - Management is optimistic about the momentum of edge AI across the business and the potential for a new cycle of semiconductor innovation [9] - The company expects to provide a financial framework for its diversification strategy and growth at the upcoming Investor Day on November 19 [34][26] Other Important Information - The company introduced the Networking Pro A7 Elite Platform, integrating Wi-Fi 7, 5G, and AI co-processing for enterprise and home networking [16] - The Snapdragon AR1 Gen 1-powered Ray-Ban Meta glasses are receiving new AI features, including real-time speech translation and location assistance [14] - The company announced the Qualcomm IoT Solutions Framework, aimed at reducing time-to-implementation and improving operational efficiencies for industrial IoT solutions [15] Q&A Session Summary Question: Strength in Automotive Segment - The strength in automotive is driven by new models launching with Qualcomm technology, reflecting a shift in market share rather than market conditions [28] Question: Arm Dispute - The company is confident in its broad, well-established license rights covering custom-designed CPUs, with the trial scheduled for December [29] Question: IoT Growth Drivers - IoT growth is driven by new product launches in PC, XR, and other areas, along with channel inventory normalization [32] Question: Sustainability of Double-Digit Growth - The company is not guiding beyond Q1 but will provide a financial framework at the Investor Day [34] Question: Chipset Gross Margins - Gross margins are expected to remain stable, with product mix playing a key role in future performance [36] Question: PC Market Contribution - The PC market is showing strong traction, with 58 platforms now in development, up from 20 at launch [38] Question: Automotive Exposure in China - The company has a diverse portfolio with design wins globally, not reliant on any specific geography [41] Question: Handset Market Dynamics - The handset market is seeing content increases and a shift towards premium-tier devices, with ASPs benefiting from more capable chipsets [44] Question: Licensing Business Seasonality - The licensing business is expected to follow normal seasonality, with no structural changes anticipated [48] Question: End Market Demand - The company is seeing strong demand, particularly from Chinese OEMs, with no significant inventory dynamics [51] Question: China Android Growth - The growth in China Android is driven by customer launch cadences and demand, not related to tariffs or pull-forward effects [54] Question: IoT Business Challenges - The IoT business is benefiting from new product launches and early demand for AI-ready industrial solutions [56] Question: Large Customer Risk - The company maintains its planning assumption of a 20% share for the 2026 launch, with no new information on customer internalization [57]

For the quarter ended September 2024, Qualcomm (QCOM) reported revenue of $10.24 billion, up 18.7% over the same period last year. EPS came in at $2.69, compared to $2.02 in the year-ago quarter. The reported revenue represents a surprise of +3.49% over the Zacks Consensus Estimate of $9.9 billion. With the consensus EPS estimate being $2.56, the EPS surprise was +5.08%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street ex ...

Qualcomm (QCOM) came out with quarterly earnings of $2.69 per share, beating the Zacks Consensus Estimate of $2.56 per share. This compares to earnings of $2.02 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 5.08%. A quarter ago, it was expected that this chipmaker would post earnings of $2.25 per share when it actually produced earnings of $2.33, delivering a surprise of 3.56%.Over the last four quarters, the company has sur ...

Qualcomm (QCOM) posted fiscal fourth-quarter earnings that exceeded analysts' expectations and announced a $15 billion stock buyback, driving shares higher after the closing bell Wednesday. The chipmaker reported fourth-quarter revenue of $10.24 billion, up 19% year-over-year and above the analyst consensus from Visible Alpha. Net income was $2.92 billion or $2.59 per share, compared to $1.49 billion or $1.32 per share a year ago and beating Wall Street projections. The revenue gains came as handset semicon ...

Fourth Quarter and Fiscal 2024 Earnings November 6, 2024 Note Regarding Forward-Looking Statements 2 In addition to historical information, this document and the conference call that it accompanies contain forward-looking statements that are inherently subject to risks and uncertainties, including but not limited to statements regarding: our growth and diversification opportunities, including those in automotive, IoT and the artificial intelligence (AI) space; our business, product and technology strategies ...

Revenue Concentration and Customer Dependency - The company derives a significant portion of its revenues from a small number of customers and licensees, particularly from premium tier handset devices, which poses a risk if revenues fluctuate[9] - In fiscal 2024, revenues from Apple, Samsung, and Xiaomi each comprised 10% or more of Qualcomm's consolidated revenues[37] - Qualcomm derives a significant portion of its revenues from a small number of customers and licensees, particularly from premium tier handset devices[9] Market Trends and Technology Integration - The company anticipates that 46% of smartphones sold in 2027 will be generative AI capable, up from 19% in 2024, indicating a significant market shift towards AI integration[22] - By 2027, at least 50% of PCs sold are expected to be AI capable, up from 22% in 2024[24] - The automotive sector is projected to see 67% of new vehicles produced by 2030 featuring embedded cellular connectivity, with 48% having 5G connectivity, up from 11% in 2024[24] - The demand for edge networking products is driven by advancements in wireless technology, with 5G enabling high-speed, low-latency connections for both mobile and fixed wireless users[24] Research and Development Focus - The company is focused on extending its technologies and products into new areas beyond mobile handsets, with ongoing investments in research and development that may not meet future operational expectations[10] - Qualcomm has invested heavily in research and development, leading to the evolution of foundational technologies in mobile, automotive, and IoT sectors[25] - Qualcomm continues to invest in research and development across various technologies, including AI, with a focus on power efficiency and personalization[38] - Qualcomm's research and development efforts focus on enhancing existing products and developing new technologies across various industries, including automotive and IoT[38] Competitive Landscape and Market Position - The company is subject to intense competition and rapid technological changes, which could affect demand for its products and technologies[13] - The competitive landscape includes major players like Broadcom, MediaTek, and Nvidia, with increasing competition from customers developing their own integrated circuit products[34] - Qualcomm's focus on innovation and patent development supports the growth of 5G technology and multimode device capabilities[34] Supply Chain and Operational Risks - The company faces risks related to supply chain dependencies on a limited number of third-party suppliers, which could impact operational results[11] - The company employs a fabless production model, relying on third-party manufacturers for integrated circuits, with major suppliers located in the Asia-Pacific region[32] - The semiconductor industry is highly cyclical, and Qualcomm is susceptible to significant downturns and fluctuations in economic conditions[16] Environmental and Social Responsibility - The company aims to reduce absolute Scope 1 and Scope 2 GHG emissions by 30% from a 2014 base year by 2025[41] - Qualcomm has set a goal to reduce absolute Scope 1 and 2 GHG emissions by 50% by 2030 from a 2020 base year[41] - Qualcomm's employee networks support diversity and inclusion, focusing on women, LGBTQ+ employees, and underrepresented populations[43] - The company has established a net-zero GHG emissions target across the value chain by 2040[41] Employee Engagement and Development - Qualcomm's workforce consists of approximately 49,000 employees, with a voluntary turnover rate of about 5% during fiscal 2024[42] - The company provides a variety of health and wellness programs through its Live+Well and Work+Well initiatives, focusing on physical and mental health[43] - Significant resources are invested in talent development, including training opportunities and performance management methodologies[43] - Human capital advancements will influence executive bonuses for fiscal 2024, with a modifier range of 0.9 to 1.1 based on performance[43] Strategic Investments and Acquisitions - Strategic investments and acquisitions are made to support new product introductions and enhance existing services[30] - Qualcomm's strategic investments through Qualcomm Ventures focus on expanding opportunities in 5G, AI, automotive, and IoT sectors[35] - The company may engage in strategic acquisitions, which could affect its results of operations and stockholder value[10] Intellectual Property and Licensing - The company has significant intellectual property assets, including patents related to CDMA and OFDMA technologies, which are crucial for its business model[21] - Qualcomm's patent portfolio is recognized as essential for 3G, 4G, and 5G technologies, driving industry growth and innovation[35] - Qualcomm's QTL segment generates significant licensing revenues from cellular standard-essential patents, primarily from sales of OFDMA-based products[35] Technology Development and Product Offerings - Qualcomm's QCT segment focuses on developing integrated circuit platforms and system software for mobile devices, automotive systems, and IoT, contributing significantly to revenue generation[21] - Qualcomm's Snapdragon platforms integrate advanced connectivity and high-performance computing technologies, supporting AI, security, and multimedia applications[32] - Qualcomm's QCT segment focuses on RF products, including 5G modem-RF products that integrate AI to enhance data speeds and battery life[32]

Financial Performance - Fiscal 2024 GAAP revenues reached $39.0 billion, with a GAAP EPS of $8.97, reflecting over 20% growth in EPS year-over-year[1] - Fourth quarter revenues were $10,244 million, a 19% increase from $8,631 million in Q4 Fiscal 2023[2] - Net income for Fiscal 2024 was $10,142 million, up 40% from $7,232 million in Fiscal 2023[3] - QCT segment revenues in Q4 Fiscal 2024 were $8,678 million, an 18% increase from $7,374 million in Q4 Fiscal 2023[4] - Automotive revenue grew by 68% year-over-year in Q4, reaching $899 million, and 55% for the full fiscal year at $2,910 million[6] - Total revenues for the three months ended September 29, 2024, increased to $10,244 million, up 18.7% from $8,631 million for the same period last year[18] - Net income for the twelve months ended September 29, 2024, was $10,110 million, compared to $7,339 million for the previous year, representing a 37.9% increase[19] - Operating income for the three months ended September 29, 2024, was $2,581 million, a significant increase from $1,411 million in the same quarter last year, reflecting an 83% growth[18] - Basic earnings per share from continuing operations for the three months ended September 29, 2024, were $2.62, compared to $1.46 for the same period last year, representing an increase of 79.5%[18] - The net income for Q4 Fiscal 2024 was $2,920 million, compared to $1,489 million in Q4 Fiscal 2023, showing a substantial increase[22] - Diluted EPS for Q4 Fiscal 2024 was $2.59, up from $1.32 in Q4 Fiscal 2023, representing a growth of 96.2%[22] Guidance and Projections - Guidance for Q1 FY25 estimates revenues between $10.5 billion and $11.3 billion, with GAAP diluted EPS projected at $2.39 to $2.59[10] - Non-GAAP EPS for Q1 FY25 is expected to be between $2.85 and $3.05, reflecting strong operational performance[10] - The company expects continued growth in revenues and operating income driven by advancements in technology and market expansion strategies[23] Expenses and Investments - Research and development expenses for the twelve months ended September 29, 2024, totaled $8,893 million, slightly up from $8,818 million in the previous year[18] - Research and development expenses for Fiscal 2024 totaled $8,893 million, with $2,024 million excluded for share-based compensation[24] - Selling, general and administrative expenses for Fiscal 2024 were $2,759 million, with $535 million excluded for share-based compensation[24] Assets and Liabilities - Total current assets increased to $25,231 million from $22,464 million, marking a 12.4% growth year-over-year[16] - Total liabilities decreased to $28,880 million from $29,459 million, indicating a reduction of 2%[17] - Cash and cash equivalents at the end of the period were $7,849 million, down from $8,527 million, reflecting a decrease of 7.9%[19] - The company reported a total stockholders' equity of $26,274 million, up from $21,581 million, which is a 21.7% increase[17] - The company generated net cash provided by operating activities of $12,202 million, compared to $11,299 million in the previous year, reflecting an increase of 8%[19] Tax and Profitability - The effective tax rate for Q4 Fiscal 2024 was 12.2%, compared to 16.5% in Q4 Fiscal 2023, reflecting a decrease in tax burden[22] - Qualcomm's EBT as a percentage of revenues for Q4 Fiscal 2024 was 25%, compared to 16% in Q4 Fiscal 2023, indicating improved profitability[22] Stock Repurchase - The company announced a new $15.0 billion stock repurchase authorization, in addition to the remaining $1.0 billion from the previous program[8] Product Development - The company highlighted its recent product announcements at Snapdragon Summit and Embedded World, emphasizing technology leadership across multiple sectors[1]

Key TakeawaysQualcomm is set to report earnings after the bell Wednesday, with analysts expecting growth in revenue and a larger bump in profits.Analysts mostly have neutral ratings on the software and hardware maker, but still believe the stock has the ability to rise in the coming months.However, JPMorgan analysts on Tuesday said a sluggish smartphone and PC market could slow Qualcomm's revenue growth in its next fiscal year. Qualcomm (QCOM) will report its fourth quarter earnings after the market closes ...

Core Viewpoint - Qualcomm is expected to report strong earnings for the fourth quarter of fiscal 2024, with revenue estimates at $9.9 billion and earnings per share (EPS) at $2.56, reflecting an upward revision in earnings estimates for 2024 and 2025 [1][2]. Earnings Estimates - The current EPS estimate for Q4 2024 is $2.56, consistent over the past week, with a slight increase from $2.54 90 days ago [2]. - For the fiscal year 2024, the EPS estimate has improved from $10.05 to $10.08, while for 2025, it has increased from $10.92 to $10.93 [1][2]. Earnings Surprise History - Qualcomm has a strong earnings surprise history, averaging a 7.6% surprise over the last four quarters, with the most recent quarter showing a 3.6% surprise [3][4]. Earnings Whispers - The company has a positive Earnings Surprise Prediction (ESP) of +0.48% and a Zacks Rank of 2 (Buy), indicating a high likelihood of beating earnings estimates [5]. Factors Influencing Results - The rollout of 5G technology is a significant driver for Qualcomm, enhancing its licensing program and diversifying revenue streams [6]. - The company is leveraging artificial intelligence (AI) to meet growing demands in the digital transformation landscape [6]. Product Developments - Qualcomm's Snapdragon 8 Gen 3 Mobile Platform has been deployed in Samsung's Galaxy Z series smartphones, showcasing its advancements in mobile technology [7]. - The Snapdragon 8s Gen 3 platform features enhanced gaming and AI capabilities, highlighting Qualcomm's position in the AI chip market [8]. Strategic Collaborations - Qualcomm partnered with Aramco to implement generative AI-powered IoT solutions in Saudi Arabia, enhancing operational efficiency through advanced technologies [9][10]. Price Performance - Over the past year, Qualcomm's stock has increased by 37.8%, although it has underperformed compared to the industry average growth of 51.1% [11]. Valuation Metrics - Qualcomm's shares are trading at a forward price/earnings ratio of 14.96, which is lower than the industry average of 21.62 and its historical mean of 17.6, indicating a relatively cheaper valuation [13]. Investment Considerations - Qualcomm is a leading manufacturer of wireless chipsets, focusing on maintaining its leadership in 5G and mobile connectivity through innovative product launches [14][15]. - The company is well-positioned to capitalize on growth opportunities in the mobile sector, particularly with its Snapdragon portfolio and advancements in driver-assistance technology [15]. Conclusion - With strong fundamentals, improving earnings estimates, and a favorable valuation, Qualcomm presents a solid investment opportunity, supported by a robust earnings surprise history and positive investor sentiment [16][17].