Pre Q2 Earnings: Is QCOM Stock a Portfolio Must-Have?

Core Viewpoint - Qualcomm is expected to report strong earnings for the second quarter of fiscal 2025, with improved revenue and earnings estimates over the past 60 days, driven by advancements in 5G technology and AI integration [1][5][13]. Earnings Estimates - The Zacks Consensus Estimate for Qualcomm's revenues is $10.64 billion and earnings per share is$2.82 for the upcoming quarter [1]. - Earnings estimates for fiscal 2025 have increased from $11.64 to$11.85 per share, and for fiscal 2026 from $12.43 to$12.61 [1][2]. Earnings Surprise History - Qualcomm has a strong earnings surprise history, averaging a 7.8% surprise over the last four quarters, with a notable 16.4% surprise in the last reported quarter [3][14]. Earnings Whispers - Qualcomm has a positive Earnings ESP of +0.86% and a Zacks Rank of 2 (Buy), indicating a high likelihood of an earnings beat for the upcoming quarter [4]. Factors Influencing Results - The rollout of 5G technology and investments in mobile licensing are expected to drive long-term revenue growth [5][11]. - Qualcomm's Snapdragon portfolio is positioned to capitalize on growth opportunities in the mobile space, particularly with the launch of new AI-focused products [6][12]. Product Launches - The Snapdragon X chip for mid-range AI desktops and laptops was launched, featuring advanced processing capabilities [6]. - Samsung has deployed the Snapdragon 8 Elite Mobile Platform in its latest smartphone models, enhancing connectivity and performance [7]. Price Performance - Over the past year, Qualcomm's stock has decreased by 12.2%, underperforming the industry average growth of 9.1% [8]. Valuation Metrics - Qualcomm's shares are trading at a forward P/E ratio of 12.09, which is lower than the industry average of 24.06 and its historical mean of 17.35, indicating a relatively cheaper valuation [9][13]. Investment Considerations - Qualcomm is focusing on maintaining its leadership in 5G and mobile connectivity through innovative product launches and technological advancements [11][12]. - The company is well-positioned to benefit from the growing demand for 5G and AI technologies, which are expected to drive future revenue growth [5][13].