QCOM's Robust Portfolio Drives Revenue Growth: Will the Trend Persist?

Qualcomm Incorporated QCOM is benefiting from solid revenue growth backed by its robust portfolio strength. The company generated 11.27 billion in revenues, up from $10.24 billion in the year-ago quarter. Qualcomm’s Automotive revenues rose 17% to a record high of $1.05 billion, driven by increased content in new vehicle launches with its Snapdragon Digital Chassis platform. As automakers continue to deploy high-performance, low-power computing and connectivity chips to bring next-generation experience to consumers, this is driving growth for Qualcomm.

Solid demand for the Snapdragon AR1 chipset for the emerging AI smart glasses category is propelling IoT revenues. In Q3, it registered $1.81 billion in IoT revenues, up 7%. Handset revenues increased 14% to $6.96 billion, backed by solid traction in premium Android handsets. 

Qualcomm’s Snapdragon 8 Elite Gen 5, the World’s Fastest Mobile System-on-a-chip, has set a benchmark in GPU performance. Snapdragon X2 Elite Extreme and Snapdragon X2 Elite, QCOM’s fast and efficient AI PC chips, bring the best-in-class CPU experience. Qualcomm has also collaborated with major automaker BMW to develop an AI-enabled Snapdragon Ride Pilot Automated Driving System. The leading-edge ADAS systems offer advanced safety systems and automated driving functions. 

Such strong emphasis on innovation is propelling revenue growth. Per our estimate, the company is set to generate $45.29 billion in revenues, indicating 2.6% year-over-year growth.

How Are Competitors Faring?

Qualcomm faces competition from Intel Corporation INTC and Advanced Micro Devices AMD. Intel reported revenues of $13.65 billion, up 2.79% year over year. The company witnessed healthy growth momentum in the Intel 18A process node and Lunar Lake. Intel witnessed healthy traction in AI PCs that have taken the market by storm and remains firmly on track to ship more than 100 million by 2025.

AMD reported revenues of $9.25 billion, up 35.6% year over year. Strong demand for fifth-gen EPYC processors and Instinct MI350 series GPUs is driving growth. AMD’s footprint is strong in the data center market thanks to strong adoption of EPYC processors. It is benefiting from strong enterprise adoption, expanded cloud deployments and emerging AI use cases.

QCOM’s Price Performance, Valuation and Estimates

Qualcomm shares have gained 3.4% over the past year compared with the industry’s growth of 77%.

Going by the price/earnings ratio, the company's shares currently trade at 13.74 forward earnings, lower than 39.75 for the industry.

Earnings estimates for 2025 and 2026 have improved over the past 60 days.

Qualcomm stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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