Well-known industry analyst Ming-Chi Kuo this week predicted stable revenue growth for Qualcomm over two quarters, which will be driven by a 50% YoY increase in shipments of Snapdragon 8 Gen 4 processors compared to the previous generation of chips.
Image source: Qualcomm
Not only will supply volumes of processors increase by 50% to 9 million units, but at the same time the average selling price will increase by 15% (up to $180). This will have a significant positive impact on Qualcomm’s revenue and earnings in the fourth quarter. Demand from Samsung, which plans to actively use Qualcomm Snapdragon 8 Gen 4 processors in its smartphones, will overlap with the revival of the Chinese market. A shift in demand towards more expensive smartphone models will contribute to an increase in average selling price and revenue. In China, as the analyst notes, sales of local smartphone brands increased year-on-year by 20%, while demand for the Apple iPhone showed stagnation.
For Qualcomm shares, these forecasts are important supporting factors, since the impact of Apple’s refusal to use modems of this brand has already been factored into the stock market in current quotes. As you know, in the future Apple will be able to abandon 5G modems developed by Qualcomm, since next year it will begin to introduce modem solutions of its own design. In addition, Qualcomm shares will be able to increase in price due to the trend of growing demand for modern smartphones and PCs with AI support, which will manifest itself next year. The increase in the average selling price of the latest generation of Qualcomm chips will also be facilitated by the transition to N3P manufacturing technology, which was carried out by TSMC. Qualcomm shares ended yesterday’s trading session with an increase of 4.74% to $178.04.