Qualcomm Navigates Choppy Smartphone Market to Deliver Strong Q3 Results; No Change to $163 FVE

Qualcomm reported fiscal third-quarter revenue higher than our expectations (but in line with management’s guidance), with the firm benefitting from the ongoing ramp of 5G smartphones and broad-based chip demand. Despite softness in smartphone and consumer Internet of Things demand, the firm has enjoyed growth in other areas as well as greater content per handset via the shift to 5G. We believe the firm is also benefiting from greater Snapdragon share for Samsung’s Galaxy S22, which we think will increase with the S23. Notably, the firm announced a new multiyear agreement with Samsung in 2023, expanding the use of Snapdragon as well as a seven-year extension of Qualcomm’s patent license agreement with Samsung through 2030. Management remained confident in growth for the rest of the year, which we attribute to increased 5G penetration.