Qualcomm shares climb 10% as AI phones drive demand
Has Qualm, A Sales Cork, Research Set Third That Which In Up Quarter Above Estimates Were Projected Facility
Shares in chip giant Qualcomm — which has set up a research facility in Cork — climbed 10% to a more than two-year high after the smartphone-focused firm signalled an artificial intelligence-fuelled rebound in demand, especially in China, following a years-long slump.
Sales to Chinese smartphone makers jumped 40% in the first half of its fiscal year, the company said, as buyers there gravitate toward higher-priced devices that can accommodate AI chatbots.
"Chinese vendors who traditionally relied more on MediaTek are going to start leveraging Qualcomm's high-end chips more as they push hard into the AI agenda," said IDC analyst Nabila Popal.
"They further represent an upside for Qualcomm because the majority of the recovery is also going to be driven by Chinese OEMs this year, coming from a tough last two years."
Qualcomm projected third-quarter sales that were above estimates.
According to preliminary data from research firm IDC, in the high-end segment, the AI buzz and the foldable products allowed the Android smartphone vendors to further differentiate themselves from Apple and garnered increased interest from Chinese consumers in the first quarter of 2024.
"We're optimistic that numbers can be driven higher, given last year's muted Android cycle and the likelihood of IoT (internet of things) improvement as inventory normalises," analysts at Wolfe Research said.
At least 14 analysts raised their price targets on Qualcomm.
Qualcomm said late last year it was investing €140m in its research facility in Cork and would create about 150 jobs in the coming years.
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