Qualcomm CEO Cristiano Amon said on Tuesday the chipmaker’s move beyond smartphones is working – but we’ll want to see the Club’s upcoming earnings report before rethinking its cautious approach. In a CNBC interview, Amon said that Qualcomm is positioned to address the need for semiconductors in products beyond cell phones – a key prong to the Club’s investment thesis in the company. At the same time, he said, Qualcomm can serve, if necessary, long-time important customers such as Apple ( AAPL ), which uses Qualcomm’s modem chips to enable cellular communications in its iPhones. “We realize that the technology we developed for mobile is finding its way into a number of other industries” that require computing power and internet connectivity outside of traditional data centers, Amon said. This generally refers to the “internet of things”, which includes products such as smart devices. In the same way, Qualcomm is also expanding its presence in the automotive industry as cars become more technologically advanced. Those end markets combined accounted for less than a quarter of Qualcomm’s $9.9 billion in product revenue in the three months ended Sept. 25. But Amon expects the stock to grow in the coming years to offset the challenges of its legacy smartphone business — including weaker demand and higher inventories. – which has recently weighed heavily on the company’s overall results. QCOM 6M mounts Qualcomm’s stock performance over the past six months. Amon also downplayed the company’s reliance on Apple, which has been working to replace Qualcomm chips with its own 5G modem chips. However, the iPhone maker has reportedly encountered some obstacles in this process, delaying the spread of the technology at home. As a result, Qualcomm now expects to have “a large portion of the 5G modem” in the 2023 iPhone, CFO Akash Palkhiwala explained on the company’s November earnings call. That’s more than the 20% stake Qualcomm originally projected in 2021, and it’s likely to increase short-term earnings. However, Qualcomm still projects “minimum contribution from Apple’s product revenues in fiscal 2025,” according to Palkhiwala. However, the company – now in the fiscal 2023 second quarter – is betting on long-term growth coming from the automotive and industrial internet. Amon said Qualcomm is “very proud” of its automotive push. “I think we’re not working with almost any car company on some things – connecting the car to the cloud, the digital cockpit experience, autonomy and [advanced driver assistance systems]”He said. Below the line of Qualcomm’s first quarter earnings due to come out on February 2, which should offer investors a fresh look at what headwinds are dissipating at all. The club has generally adopted a cautious approach to Qualcomm in the new months, especially. After that, the earnings November is printed with weak guidance. Other market areas look like better places to make new capital when the smartphone correction comes out. Qualcomm shares are down about 40% in 2022. Over the past three months, QCOM shares have increased more than 7% , roughly in line with the gain of the S&P 500 during that period. (Jim Cramer’s Charitable Trust is long QCOM. Read here for a full list of stocks.) , you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling shares in a charitable trust portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing a statement a trade before executing a trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO THE TERMS AND CONDITIONS AND PRIVACY POLICY, ALONG WITH THE DISCLAIMER. No fiduciary obligation or duty is, or is created, based on the receipt of the information provided in connection with the investment club. No special results or profits are guaranteed.
Qualcomm President and CEO Cristiano Amon speaks about Qualcomm’s digital chassis for automakers at a news conference during CES 2022 in Las Vegas, Nevada, January 4, 2022.
Steve Marcus Reuters
Qualcomm CEO Cristiano Amon said on Tuesday the chipmaker’s move beyond smartphones is working – but we’ll want to see the Club’s upcoming earnings report before rethinking its cautious approach.