Key Takeaways
- Qualcomm shares slid Thursday after the chipmaker reported fiscal first-quarter revenue from licensing that missed expectations.
- The chipmaker licenses its patented technologies to companies including Apple, but the iPhone maker is expected to move some of its portfolio in house, analysts said.
- Other analysts said a major smartphone upgrade cycle, which would benefit Qualcomm, could be at least a year away.
Qualcomm (QCOM) shares slid Thursday as analysts raised concerns about the company’s relationships with major smartphone makers Apple (AAPL) and Huawei following the company’s fiscal first-quarter results.
The chipmaker licenses its patented technologies to some of the world’s biggest tech companies, including Apple. However, Apple is moving a portion of its iPhone portfolio in house later this year, which has investors worried, analysts at JPMorgan said. The expiration of a deal with Chinese smartphone giant Huawei “is also serving to limit upside,” the analysts added.
First-quarter licensing revenue missed expectations, even as overall sales reached a record high and beat Street estimates, sending shares of Qualcomm down nearly 4% Thursday to $169.32. The market reaction has been “overwhelmed by investor concerns around the factors outside of Qualcomm’s control,” JPMorgan said, lowering its price target to $195 from $200 but maintaining an “overweight” rating.
Citi analysts said a smartphone upgrade cycle, which would benefit Qualcomm, could be at least a year away, given the lack of a “killer app” that would drive consumers to spring for a new device. The analysts reiterated a “neutral” rating and $185 target.
Meanwhile, Bank of America maintained its bullish $245 price target, citing “Qualcomm’s ability to lead with smartphone technologies and diversify its portfolio” into automotive modems and chips for laptops. During the first quarter, Qualcomm also grew its share with Apple rival Samsung, the bank noted, powering its Galaxy S25 devices.
Despite Thursday’s losses, shares of Qualcomm are up more than 14% over the past 12 months.