Qualcomm
Overall, Qualcomm's shares are up more than 200% from the March 2020 bottom. Unlike many tech stocks, it's been a relative outperformer during this period of market volatility as it's only down 6% from it's all-time high set in January. Currently, Qualcomm's stock is quite attractive from a value perspective with a forward P/E of 14.4, dividend yield of 1.5%, and 30% revenue growth - unless someone believes that spending in its customers' end-markets is about to slow.
Inside the Numbers
In its fiscal Q1, Qualcomm reported $3.23 in earnings per share which were 49% higher than last year and beat expectations of $3.01 per share. Revenue came in at $10.7 billion vs. $10.42 billion expected and a 30% increase from last year.
The company also issued guidance for the next quarter that came in between $10.2 billion and $11 billion in sales which was significantly above expectations of $9.6 billion.
QCT, Qualcomm's chip business, generated $8.9 billion in sales which is a 35% increase from the same quarter last year. This was a deceleration from last year's 63% increase. The company also said that its ability to fulfill demand was improving and should continue improving over the course of the full year.
Qualcomm has benefitted from growth in phone sales with a 42% increase in handset chip sales which reached $6 billion. Its Snapdragon chips are integral for Android phones and had 60% growth and are necessary for 5G connections. Two small but fast-growing divisions are automotive which increased 21% to $256 million and IOT which grew 48% to reach $1.5 billion.
Essentially, Qualcomm is a high-end and high-quality supplier for a number of the biggest tech trends like 5G, smartphones, and wireless connectivity. Investors who are confident in the sector's growth should consider the stock especially given its favorable valuation.
