Qualcomm Vs. Arm: Pre-Earnings Semiconductor Showdown

As Qualcomm Inc QCOM and Arm Holdings PLC ARM gear up to release their earnings Wednesday, the two semiconductor giants face bearish technical pressures but diverge in their growth paths.

Qualcomm: Navigating Challenges Amid Bearish Technicals

Qualcomm, a mainstay in mobile chipsets, faces strong bearish signals.

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QCOM stock is trading at $165.87, well below its eight, 20, and 50-day simple moving averages. Analysts expect fourth quarter EPS of $2.56 on revenue of $9.91 billion, but the stock's recent bearish signals from technical indicators suggest caution.

QCOM's MACD (Moving Average Convergence/Divergence) is -0.94, and its RSI (Relative Strength Index) is 45.95, indicating a neutral condition with limited immediate upside potential due to bearish momentum.

Qualcomm's expansion into automotive and IoT markets showcases its strategic shift, but near-term pressures from regulatory concerns and competition—particularly from Apple Inc's AAPL modem push—continue to cloud investor sentiment.

Read Also: AMD’s AI Data Center Business Booms: CEO Says It’s ‘Closed A Good Part Of That Gap’ With Nvidia

Arm Holdings: Bullish Hints Despite Near-Term Pressures

Arm, with its IP-licensing model and strong YTD performance, shows resilience amid bearish trends.

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Trading at $139.89, ARM stock is below short-to medium-term SMAs (eight-day at $145.69, 20-day at 148.79, and 50-day at $141.22), signaling a bearish trend prevailing. Moreover, its MACD is a negative 0.23, which reinforces the bearish trend.

However, the 200-day SMA provides support at $131.04, signaling potential long-term strength.

Analysts forecast that the second quarter EPS will be 26 cents on revenue of $808.37 million.

Unlike Qualcomm, Arm's royalty-based model shields it from manufacturing woes, positioning it for growth in high-demand areas like AI, data centers, and IoT.

Different Risks, Different Rewards

While both stocks have bearish technical signals, Qualcomm's cyclicality contrasts with Arm's steadier IP-driven model. Investors eyeing Qualcomm may anticipate a comeback in 5G and automotive, while Arm's appeal lies in its growth as a diversified IP giant.

This earnings season will be pivotal for both, but the charts suggest caution.

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