Qualcomm Exceeds Expectations In Q3: 5 Analysts Debate Impact Of Huawei Export Restrictions

Qualcomm reported its revenues and earnings higher than estimates on strong Auto and IoT segments. Guidance shows Huawei impact.

Shares of Qualcomm Inc QCOM were falling on Thursday, despite the company reporting upbeat fiscal third-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways.

Piper Sandler On Qualcomm

Analyst Harsh Kumar reiterated an Overweight rating, while raising the price target from $185 to $205.

Qualcomm reported its quarterly results and guidance ahead of expectations for both revenues and earnings, with the outperformance being driven by "strength coming from Android as well as the upcoming ramp with QCOM’s modem only customer," Kumar said in a note. The extra week in the September quarter will offset the earlier-than-expected revoking of the company's license to sell to Huawei, he added.

Although Qualcomm reported strong growth in its automotive business, "the segment was guided flat sequentially for September," the analyst stated. The company continued to "cite opportunities around the AI PC which are encouraging in our view," he further wrote.

JPMorgan On Qualcomm

Analyst Samik Chatterjee maintained an Overweight rating, while cutting the price target from $235 to $230.

Qualcomm delivered an earnings beat on stronger revenues of $9.4 billion versus consensus of $9.2 billion, Chatterjee said. Earnings came in at $2.33, higher than Street expectations of $2.26, he added.

"The strength of the premium smartphone market in relation to Chinese OEMs as well as upsides in the Autos and IoT businesses, which are critical to Qualcomm's efforts towards diversification of its end-markets, helped deliver results for F3Q that exceeded investor expectations," the analyst wrote. The company's fiscal fourth-quarter guidance was also better than feared, despite concerns around headwinds from the end of the license to ship to Huawei, he further stated.

Check out other analyst stock ratings.

Cantor Fitzgerald On Qualcomm

Analyst C.J. Muse reaffirmed a Neutral rating and price target of $215.

While June results and September guide came ahead of expectations, the company's initial guidance for the December quarter reflects only 5% year-on-year growth, which was "disappointing," Muse said. Management was preparing investors for "removing Huawei out of model," he added.

"The major takeaway was diversification and uplift to both the June and September Qs from Automotive," the analyst wrote. He added that auto revenues grew 34% sequentially to $811 million, "a clear indication the company is well on its way to achieving its stated goal of $4B in revenues by FY26 and $9B by FY31," he further stated.

WestPark Capital On Qualcomm

Analyst Kevin Garrigan reiterated a Hold rating on the stock.

"The company benefited from strength in the premium-tier smartphone market, as well as upside in both Automotive and IoT segments," Garrigan wrote in a note. The fiscal fourth-quarter guidance benefits from an extra week but includes the headwind of export restrictions to Huawei, he added.

"Management noted the Huawei headwind would persist into Q1 FY25," the analyst wrote. Revenue generation from AI "is likely to be more of a FY25 story, in our view," he further stated.

Oppenheimer On Qualcomm

Analyst Rick Schafer maintained a Perform rating on the stock.

Qualcomm's results were mixed, Schafer said. He added that Apple Inc "remains motivated to part with QCOM, a lingering $10B overhang."

While reports suggest Apple's modem could debut in some iPhone 17 SKUs launching next year, Android is expected to be "seasonally lower in F4Q," the analyst stated. "It remains to be seen whether AI will drive a meaningful acceleration in refresh and/or demonstrably grow TAM," he further wrote.

QCOM Price Action: Shares of Qualcomm were down 8.7% to $165.57 at the time of publication on Thursday.

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