Qualcomm F2Q24: Lots of Positives with Auto and AI Tailwinds

May 3, 2024 / Ben Bajarin

Overall take aways, positives and negatives, along with major questions we still hear from investors in our note below.


Key Takeaways

  • Strong performance in a challenging market
  • Extremely positive growth signs in auto and IOT
  • Increasing strength of the sum of the parts/diversification story with AI on the horizon

Qualcomm had a strong quarter, with a surprising growth uptick in auto that seems to buck the trend of challenges by other semiconductor companies selling to auto OEMs. Which we view as a positive of the portfolio and that Qualcomm is taking share from other semiconductor companies auto product lines.

In said challenging smartphone market, the key metric that caught our eye is Qualcomm continuing to increase in the premium tier with OEM partners in key markets like China. We acknowledge the looming question of what will happen with Huawei from a competitive standpoint, but don’t think we see any sign of that impact in the tiers Qualcomm competes (more high-end) yet.


  • Strong Performance in a Challenging Market: Despite the ongoing challenges in the smartphone market, Qualcomm posted strong numbers, highlighting its resilience and ability to navigate difficult conditions. Particularly, its strength in the China Android market and notable gains in premium-tier handset shares were emphasized as key performance drivers.
  • Revenue and Earnings Beat: The company reported revenues and earnings that either met or exceeded consensus expectations, underpinning its solid operational execution.
  • Growth in Automotive and IoT: Qualcomm demonstrated robust growth in its automotive and IoT segments. The automotive pipeline, for instance, grew to $45 billion from a previously forecasted $30 billion, showcasing significant traction in this high-growth area.
  • Product Diversification: Qualcomm’s strategic diversification beyond smartphones into areas such as automotive, IoT, PCs, AR/VR has started to pay dividends, providing sustainable growth drivers and helping to mitigate the impact of consumer spending headwinds in the smartphone sector.


  • Seasonal Declines and Market Challenges:Qualcomm faced some seasonal declines and market challenges, especially in its forecast for the upcoming quarter, which projected only slight or moderate growth in certain segments.
  • Competition and Market Dynamics: Qualcomm continues to navigate a complex market environment characterized by intense competition and changing dynamics. This includes the anticipated share loss within the Samsung platform back to historical levels and the loss of Huawei 4G business as Huawei transitions to internal 5G solutions.
  • Mixed Guidance for the Next Quarter: Although Qualcomm’s performance this quarter was strong, its guidance for the next quarter was more cautious, reflecting the ongoing challenges and uncertainties in the global semiconductor market.

The major questions on investors’ minds regarding Qualcomm’s latest quarterly earnings, as derived from our conversations with investors.

  • How is Qualcomm maintaining its market position, especially with the detailed competitive dynamics, including the challenges posed by large customers potentially insourcing key components?
  • What are the implications of Qualcomm’s anticipated share loss within the Samsung platform and the transition of Huawei to internal 5G solutions for the company’s market share and revenue streams?
  • Given the significant growth and expansion of Qualcomm’s automotive pipeline from $30 billion to $45 billion and the stated near-term target of more than $4 billion in FY26, how sustainable is this growth trajectory in the face of evolving market demands and competition?
  • What are the specifics of the momentum in the automotive sector, including the ADAS wins mentioned for the 2026 model year, and how does Qualcomm plan to capitalize on this growth?
  • With Qualcomm’s diversification into various end markets such as PCs, AR/VR, and more, leveraging technology developed for the smartphone market, what is the roadmap for these new ventures, and what revenue expectations does Qualcomm have for these sectors?
  • How does Qualcomm view the upcoming PC processors launch at the Microsoft Build event, especially with the emphasis on higher TOPs than the competition and better operating system support?
  • Given the beat-and-raise quarter Qualcomm has reported, with robust demand in the China Android market and 40% growth in China OEMs year over year, how does the company view its future financial health, especially in terms of earnings and revenue growth.
  • In light of Qualcomm’s strategic initiatives, such as its expansion into automotive and IoT and its emphasis on diversified product development, how does the company plan to navigate the potential headwinds from the global semiconductor shortage, supply chain disruptions, and the changing competitive landscape?
  • How will Qualcomm address the risks associated with customer in-sourcing and the reemergence of key competitors in the market, particularly in the Chinese market with Huawei’s return as a major player?


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