Shares of Qualcomm Inc (NASDAQ:QCOM) surged as much as 11.2% in premarket trading on Thursday, reversing earlier losses despite issuing guidance that came in below expectations. The stock had initially dropped about 6% after hours before turning sharply higher following comments from CEO Cristiano Amon.
Amon said the company plans to begin shipping chips to a major hyperscaler data center client within the current calendar year, ahead of the previously indicated fiscal 2027 timeline. He also noted that China’s smartphone market — Qualcomm’s largest end market — is expected to bottom out in the third quarter before returning to sequential growth in the following period.
The chipmaker reported adjusted earnings per share of $2.65, beating analyst estimates of $2.55. Revenue totaled $10.6 billion, slightly ahead of the $10.58 billion consensus, though down from $10.98 billion in the same quarter last year.
For the third quarter, Qualcomm projected revenue in the range of $9.2 billion to $10 billion, with a midpoint of $9.6 billion, below the $10.26 billion expected by analysts. Adjusted EPS is forecast between $2.10 and $2.30, with a midpoint of $2.20 also missing the $2.43 estimate.
“We are pleased to deliver results in line with our guidance, reflecting solid execution as we navigate a challenging memory environment,” said Cristiano Amon, President and CEO. “We are in a period of profound industry transformation — the rise of AI agents is reshaping our roadmap across every platform we develop.”
Automotive revenue hit a record $1.33 billion, rising 38% year-over-year. Combined automotive and IoT sales increased 20% compared to a year earlier. Meanwhile, handset revenue declined 13% to $6.02 billion. The QTL licensing segment generated $1.38 billion in revenue, up 5% year-over-year.
Analysts at Morgan Stanley maintained a cautious view, noting that “as the stock may struggle to keep up with peers having more tangible exposure to AI, and the rest of the business outside of autos looks pressured.”