(Reuters) – Qualcomm shares rose 4% in premarket buying and selling on Thursday after the smartphone-focused chipmaker signaled an AI-fueled rebound in demand, particularly in China, after a two-year droop.
Gross sales to Chinese language smartphone makers jumped 40% within the first half of its fiscal 12 months, the corporate mentioned on Wednesday, as consumers there gravitate towards higher-priced gadgets that may accommodate AI chatbots.
“Chinese language distributors who historically relied extra on MediaTek, are going to start out leveraging Qualcomm’s high-end chips extra as they push exhausting into the AI Agenda,” mentioned IDC analyst Nabila Popal.
“They additional symbolize an upside for Qualcomm as a result of majority of the restoration can be going to be pushed by Chinese language OEMs this 12 months, coming from a troublesome final two years.”
Qualcomm on Wednesday projected third-quarter gross sales that have been above estimates because it additionally advantages from its IoT (Web of issues) and auto segments.
The corporate, the largest provider of smartphone chips, was on the right track so as to add greater than $8 billion to its market worth primarily based on premarket actions. Different semiconductor companies reminiscent of Arm and Broadcom rose 2.8% and a pair of.4%, respectively.
In response to preliminary knowledge from analysis agency IDC, within the high-end phase, the AI buzz and the foldable merchandise allowed the Android smartphone distributors to additional differentiate themselves from Apple and garnered elevated curiosity from Chinese language customers within the first quarter of 2024.
“We’re optimistic that numbers may be pushed larger, given final 12 months’s muted Android cycle and the chance of IoT(web of issues) enchancment as stock normalizes,” analysts at Wolfe Analysis mentioned.
Not less than 14 analysts raised their value targets on Qualcomm, in response to LSEG knowledge.
Qualcomm’s shares have gained 13.5% this 12 months following a 31.5% rise in 2023.
Shares of Apple, which is about to report earnings after market closes on Thursday, have been up 1.05% in premarket buying and selling.
(Reporting by Harshita Mary Varghese; Modifying by Sriraj Kalluvila)