Core Insights - Qualcomm reported fourth quarter earnings that exceeded expectations, with adjusted earnings per share (EPS) of $3.00 on revenue of $11.27 billion, surpassing analyst forecasts of $2.88 EPS on $10.77 billion revenue [1][3] - The company provided guidance for the next quarter between $11.8 billion and $12.6 billion, higher than the anticipated $11.59 billion [1] Financial Performance - Qualcomm's QCT segment generated $9.8 billion in revenue, exceeding expectations of $9.3 billion, while the QTL segment brought in $1.4 billion, meeting expectations [4] - The company incurred a one-time non-cash tax-related charge of $5.7 billion, which impacted GAAP results but is expected to lower future cash tax payments [2] Market Challenges - Qualcomm faces the risk of losing Apple as a major customer for wireless chips, as Apple is transitioning to its own custom chips for its iPhone lineup [5] - The smartphone market has slowed, affecting Qualcomm's revenue generation from smartphone chips and licensing agreements [4] Strategic Initiatives - To mitigate risks, Qualcomm is diversifying its business by entering the AI data center and PC chip markets [5] - The company recently launched its AI200 and AI250 data center chips, with availability planned for 2026 and 2027 respectively, marking its first direct competition with Nvidia and AMD [6][7]

Core Viewpoint - Qualcomm is diversifying its business by entering the AI data center market, launching new AI chips and rack-scale server products, while facing challenges in its traditional smartphone chip business [1][6][7]. Financial Performance - Qualcomm is expected to report earnings per share (EPS) of $2.85 on revenue of $10.7 billion for the upcoming quarter, compared to EPS of $2.69 on revenue of $10.2 billion in the same quarter of 2024 [4]. - The QCT segment, which includes smartphone, internet of things, and automotive businesses, is projected to generate $9.3 billion, reflecting a year-over-year increase of 7.6% [8]. - The QTL licensing segment is anticipated to bring in $1.4 billion [8]. Market Position and Competition - Qualcomm's stock rose 11% following the announcement of its new AI products, but it still lags behind competitors like Nvidia and AMD, with shares up only 8% over the past 12 months compared to Nvidia's 54% and AMD's 81% [3]. - The company is facing the risk of losing Apple as a major customer for wireless chips, as Apple is moving towards using its own custom chips [5]. Industry Trends - The AI data center market is expected to grow to approximately $114 billion by 2030, providing Qualcomm with an opportunity to diversify away from the low-growth smartphone market, which currently accounts for about 75% of its revenues [7].