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Qualcomm’s Optimistic Sales Projection Hinges On Fast 5G Takeup

The world’s largest supplier of smartphone chips, Qualcomm, has adjusted its June quarter forecast to be far more optimistic than previously predicted.

Wall Street analysts predicted a $US7.11 billion profit for the quarter, with shares at $US1.52, however Qualcomm have adjusted to forecast profits of US$7.5 billion, with shares at US$1.65 – according to Refinitiv.

This follows a strong Jan-March quarter where Qualcomm enjoyed sales of US$7.93 billion, outperforming analyst estimates of US$7.62 billion.

The adjustment bets on a strong consumer uptake of 5G smartphones, which will ease the chip shortages.

Qualcomm’s shares rose 83 per cent over the past twelve months, although they are somewhat hamstrung by their reliance on manufacturing partners, such as TSMC and Samsung.

As Qualcomm’s CFO Akash Palkhiwala told Reuters, meeting capacity is key, which is why “one of the key drivers of growth of expenses between the second and third fiscal quarter” will be investing in their companies.

As Huawei remains blocked by US trade sanctions, Palkhiwala sees this as “a tremendous opportunity in gaining market share, not just for the short term into fiscal 2022, but also for the longer term and beyond that.”

 

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