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Qualcomm Inc QCOM

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Qualcomm Enjoys Robust 5G-Related Demand in Q2; No Change to $136 FVE

Abhinav Davuluri, CFA Sector Strategist

Analyst Note

| Abhinav Davuluri, CFA |

Qualcomm reported fiscal second-quarter results at the high end of management’s guidance, with the firm benefiting from the ongoing ramp-up of 5G smartphones. Chipset, or QCT, sales were boosted by Apple’s 5G iPhone 12, which features Qualcomm’s modem and other content such as a transceiver and subsystem for the sub-6 GHz portion of the overall 5G module. For calendar 2021, management expects high-single-digit unit growth for smartphones, with 450 million-550 million 5G handset shipments. The shares of narrow-moat Qualcomm were up 5% after hours on April 28 and now trade modestly above our unchanged fair value estimate of $136. We recommend prospective investors seek a wider margin of safety.

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Company Profile

Business Description

Qualcomm develops and licenses wireless technology and also designs chips for smartphones. The company's key patents revolve around CDMA and OFDMA technologies, which are standards in wireless communications that are the backbone of all 3G and 4G networks. The firm is a leader in 5G network technology as well. Qualcomm's IP is licensed by virtually all wireless device makers. The firm is also the world's largest wireless chip vendor, supplying nearly every premier handset maker with leading-edge processors.

5775 Morehouse Drive
San Diego, CA, 92121-1714
T +1 858 587-1121
Sector Technology
Industry Semiconductors
Most Recent Earnings Mar 31, 2021
Fiscal Year End Sep 27, 2021
Stock Type Cyclical
Employees 41,000