Qualcomm and Arm each cruise to another earnings and revenue beat

The pc chipmakers Qualcomm Inc. and Arm Holdings Plc each reported robust earnings and income beats as they delivered their newest monetary outcomes at this time, but whereas the previous’s inventory popped in prolonged buying and selling, the latter’s flopped.

Qualcomm reported fiscal fourth-quarter earnings earlier than sure prices corresponding to inventory compensation of $2.69 per share, simply forward of Wall Avenue’s $2.56 goal, whereas its income got here to only over $10.24 billion, breezing previous the consensus estimate of $9.9 billion. Seeking to the present quarter, it’s forecasting gross sales of between $10.5 billion and $11.3 billion, with the midpoint of that vary beating the Avenue’s forecast of $10.6 billion.

The smartphone chipmaker additionally reported internet revenue of $2.92 billion within the quarter, an enormous leap from the $1.49 billion revenue it delivered in the identical interval one 12 months in the past. Lastly, it delivered $33.19 billion in whole income for fiscal 2024, up 9% from the prior 12 months.

Qualcomm’s inventory made speedy beneficial properties on the report, and at one stage it was up greater than 10% earlier than settling again right down to a 6% achieve. That got here after the inventory rose 4% through the common buying and selling session previous to the outcomes, as the general market boomed on Donald Trump’s presidential election win.

The corporate’s fortunes have lengthy been tied to that of the smartphone sector, because it’s focus is totally on chips for handsets corresponding to system-on-a-chip processors, antennas and modems. It offers the chips that energy the overwhelming majority of the world’s Android smartphones, and likewise sells modem and associated chips to Apple which might be utilized in iPhones.

Handset chip gross sales within the quarter rose 12%, to $6.1 billion, and the corporate is anticipating good issues from its newest high-end chip, the Snapdragon 8 Elite, which was launched in October and can ship in its first Android telephones within the coming weeks.

In latest instances, underneath Chief Government Cristiano Amon (pictured), Qualcomm has tried to maneuver away from its reliance on smartphones, investing heavily into other industries, corresponding to private computer systems, automotive autos and industrial machines. In a convention name with analysts, the CEO promised to step up these efforts within the coming fiscal 12 months with the intention to capitalize on the calls for for high-powered processors that may energy synthetic intelligence workloads.

“We are going to proceed to rework Qualcomm from a wi-fi communications firm right into a linked computing firm for the age of AI,” Amon stated.

Qualcomm’s QCT phase, which covers gross sales of chips for handsets, automobiles and different markets, delivered income of $7.37 billion within the quarter, up 18% from a 12 months earlier. The QTL phase, which licenses the corporate’s patented applied sciences to smartphone makers, added $1.52 billion, up 21%.

Arm tops expectations however its inventory wavers

In its fiscal second-quarter outcomes, Arm delivered equally spectacular numbers, reporting earnings earlier than sure prices of 30 cents per share, beating the Avenue’s goal of 26 cents. Income for the interval got here to $844 million, forward of the $810 million analyst consensus estimate.

For the present quarter, Arm is guiding for income in a broad vary of $920 million to $970 million, the midpoint of which additionally is available in above consensus of $939 million.

Not like Qualcomm, which sells chips produced by contract chipmakers, Arm doesn’t truly promote processors itself, however moderately licenses its chip designs to semiconductor and smartphone makers. Its most superior expertise, known as Armv9, is claimed to be delivering twice the royalty charges of its predecessor Armv8.

Along with smartphones, Arm can also be making robust advances within the cloud server processor phase. Clients corresponding to Microsoft Corp. and Nvidia Corp. construct superior processors for AI and different workloads based mostly on its designs.

Arm CEO Rene Haas (pictured, adjoining) stated demand for the Armv9 and CSS compute platforms continues to exceed expectations. “AI is all over the place and is producing new alternatives for the Arm compute platform from the cloud to the sting,” Haas added.

Regardless of the robust outcomes, buyers weren’t almost as impressed with Arm as they have been with Qualcomm, and the corporate’s inventory fell greater than 5%, erasing a achieve of two% through the common buying and selling session.

Arm occurs to be embroiled in an more and more bitter legal dispute with Qualcomm, which is one in every of its largest prospects. Final month, the corporate reportedly gave Qualcomm a 60-day discover that it intends to cancel its architectural chip design license.

The dispute stems from Qualcomm’s 2021 acquisition of a chip design startup known as Nuvia. Arm sued Qualcomm shortly after it accomplished that acquisition, arguing that the corporate ought to have requested for its consent to make use of Nuvia’s mental property, which relies on designs created underneath its architectural license from Arm.

The matter is predicted to go to trial subsequent month.

Photographs: Qualcomm and Arm/YouTube