Qualcomm and Arm Announce Earnings
Qualcomm Slightly Beats Expectations, Arm Misses Revenue Forecast and Shares Drop 8.65%
On July 30 (local time), US semiconductor company Qualcomm announced that it recorded revenue of $10.37 billion and earnings per share (EPS) of $2.77 for the third quarter of fiscal year 2025.
Both revenue and EPS slightly exceeded the figures compiled by market research firm LSEG, which were $10.35 billion and $2.71, respectively.
Qualcomm projected revenue of $10.7 billion and EPS of $2.85 for the July?September quarter. These forecasts surpass Wall Street's expectations of $10.35 billion in revenue and $2.83 in EPS.
Qualcomm's core business is Snapdragon chips (processors and modems) for smartphones. The company sells these chips to Samsung Electronics and others, and also supplies modems to Apple. The mobile chip business segment generated $6.33 billion in revenue this quarter, falling short of Wall Street's expectation of $6.44 billion. According to Bloomberg News, after Qualcomm showed sluggish growth in the mobile chip market, its stock price declined in after-hours trading, and concerns have grown that tariffs could negatively impact the entire industry.
Qualcomm's chips are also installed in Meta's Ray-Ban smart glasses. Cristiano Amon, Qualcomm CEO, mentioned the collaboration with Meta, stating that products like the Ray-Ban smart glasses are representative examples of their "personal AI strategy." Akash Palkhiwala, Qualcomm CFO, said, "Mark Zuckerberg, Meta CEO, today released a video outlining a clear vision for how personal AI and artificial superintelligence will evolve," adding, "We are a key partner in realizing that vision."
On the same day, CEO Zuckerberg said on the social networking service Facebook, "The development of artificial superintelligence is now imminent," and, "This AI will usher in a new era of personal empowerment."
CEO Amon stated that Qualcomm will begin providing chip business growth rate data excluding Apple, which is expected to discontinue supply in the future, and projected about 15% growth this year. He also said that Qualcomm is considering supplying AI chips for data centers and is currently negotiating AI chip supply with a major cloud company. CEO Amon projected that Qualcomm could start recording related revenue from fiscal year 2028.
CFO Palkhiwala said, "In the future, the automotive and Internet of Things (IoT) sectors will surpass Apple in revenue."
Qualcomm reported that it paid approximately $1 billion in cash dividends and repurchased 19 million shares of its own stock for $2.8 billion.
Qualcomm's stock price fell 1.86% during regular trading on the New York Stock Exchange that day. As the results only met expectations, the stock declined by 4.7% in after-hours trading.
Meanwhile, British semiconductor design company Arm announced that it recorded $1.05 billion in revenue and $0.35 in EPS for the second quarter. While EPS met Wall Street expectations, revenue fell short of the expected $1.06 billion.
Arm forecast third-quarter revenue in the range of $1.01 billion to $1.11 billion, which is similar to LSEG's projection of $1.05 billion.
On the same day, Arm CEO Rene Haas suggested in an interview with foreign media that the company is considering its own chip designs. Until now, Arm has sold design blueprints without manufacturing chips itself.
During regular trading on the New York Stock Exchange that day, Arm's stock price closed down 0.09%, but after the earnings announcement, it plunged 8.65% as revenue missed expectations.
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