Qualcomm Is Seeing Strong Smartphone Demand, but Is the Stock a Buy?

Core Insights - Qualcomm reported strong fiscal Q1 results with a record revenue of $11.67 billion, a 17% increase year-over-year, surpassing analyst expectations [2][8] - Despite robust performance, Qualcomm's stock fell, attributed to slightly lower-than-expected licensing revenue and market reactions [10][13] Revenue Performance - Qualcomm achieved double-digit revenue growth for the third consecutive quarter, setting a new quarterly record [2] - Revenue from the chip segment (QCT) rose 20% to$ 10.1 billion, with handset revenue increasing 13% to $7.6 billion, automotive revenue soaring 61% to$ 961 million, and IoT revenue surging 36% to $1.5 billion [3][7] Segment Analysis - The strong performance in handset revenue was driven by higher volumes from premium Android devices, particularly the Samsung Galaxy S25 [4] - In the automotive segment, Qualcomm is collaborating with automakers on AI-powered systems, indicating growth potential in this area [5] - The licensing segment (QTL) saw a 5% increase in revenue to$ 1.5 billion, with key agreements extended with major OEMs [6][7] Future Guidance - Qualcomm provided guidance for fiscal Q2 revenue between $10.3 billion and$ 11.2 billion, indicating growth of 10% to 19% [8] - The company anticipates a 10% increase in handset revenue, a 50% growth in automotive revenue, and a 15% rise in IoT revenue for the upcoming quarter [9] Market Position and Valuation - Qualcomm is aiming to generate approximately $22 billion in non-handset revenue by 2029, more than doubling its current non-handset revenue run rate [12] - The company trades at a forward P/E ratio of 15 and a PEG ratio of 0.6, suggesting it may be undervalued compared to growth expectations [12]