Qualcomm Rides AI Wave To Record Quarter, But Lowered Q2 Guidance Thanks To Seasonality And Apple Shipments Drags Down Stock

Despite beating the street’s earnings expectations, posting a record first-quarter revenue, and showcasing strength in on-device artificial intelligence inference, Qualcomm Inc. QCOM shares fell 4.6% after market hours over the weak second-quarter guidance.

What Happened: Qualcomm's QCT segment delivered a record $10.1 billion in the first quarter, up 20% year-over-year.

However, the company CFO and COO, Akash Palkhiwala, during its earnings call said that Qualcomm expects QCT revenues of $8.9 billion to $9.5 billion.

QCT, which stands for Qualcomm CDMA Technologies, is a division of Qualcomm, one of the largest suppliers of wireless chipset technology and software solutions.

“On a sequential basis, the decline in QCT handset revenues is primarily driven by seasonality and shipments to Apple,” added Palkhiwala.

Furthermore, from an earnings-per-share perspective, the CFO added that “third quarter is the low point because you don’t have as many flagship launches in it.”

Thus, despite a strong first quarter the stock took a beating and fell 4.6% in after-hours to $167.77 apiece. The shares also fell 4.36% overnight on Robinhood.

Why It Matters: Despite the guidance headwinds, Qualcomm emphasized its leadership in on-device AI inference, highlighting the DeepSeek-R1 models running on Snapdragon devices.

The president and CEO, Cristiano R Amon stated that increasing AI adoption encourages the development of more targeted, purpose-oriented models and applications.

“With the industry’s most powerful and efficient AI processors for the edge, we’re well-positioned to drive this transition and benefit from this upcoming inflection point,” he added.

Amon also highlighted the Samsung Galaxy S25 series featuring QCOM’s Snapdragon 8 Elite. “The Snapdragon 8 Elite for Galaxy delivers the latest AI experiences, showcasing one of the best integrations of Galaxy AI and Google Gemini,” he added.

First Quarter Highlights: Qualcomm’s first quarter revenue hit a record $11.7 billion up 17% annually, beating estimates of $10.93 billion. EPS also surpassed expectations at $3.41.

QCT segment revenue was driven by handsets at $7.57 billion, up 13% year-on-year. The QCT automotive segment was up 61% annually at $961 million, a sixth consecutive record quarter. Additionally, the Internet of Things grew by 36% year-on-year to $1.55 billion.

Lastly, Qualcomm Technology Licensing (QTL) revenue reached $1.5B, up 5% annually.

Price Action: Qualcomm stock has risen 14.46% on a year-to-date basis, whereas the exchange-traded fund tracking Nasdaq 100, Invesco QQQ Trust, Series 1 QQQ advanced 3.26% in the same period. Over the last year, QCOM grew by 22.04% and QQQ was up 23.21%.

The average price target among 30 analysts tracked by Benzinga is $199.22 with a ‘buy' rating. The estimates range from $125 to $270 apiece. Recent ratings from Barclays, Mizuho, and Melius Research suggest a $193.33 target, implying a potential upside of 15.24%.