Qualcomm's Fiscal Q3 Results Show Strong Growth in Mobile Processors, AI Adoption, and Automotive Business

Qualcomm reported Q3 adjusted revenue of $10.4 bln, up 10% YoY, with adjusted EPS of $2.77, up 19% YoY. The company's Snapdragon Processors led the charge, with Automotive and IoT segments showing strong growth. Qualcomm's Snapdragon Digital Chassis won contracts in the automotive industry, and the Snapdragon X Series powers PCs from major manufacturers. QCOM stock is down 3.8% YTD, compared to the Nasdaq Composite Index's 10.9% gain.

Qualcomm (NASDAQ: QCOM), a leading provider of wireless technology and semiconductor solutions, reported strong third-quarter (Q3) fiscal 2025 earnings, with adjusted revenue reaching $10.4 billion, up 10% year-over-year (YoY). The company's adjusted earnings per share (EPS) rose to $2.77, representing a 19% YoY increase, surpassing analyst expectations [1].

The company's Snapdragon processors led the charge, with the automotive and Internet of Things (IoT) segments showing particularly robust growth. The automotive segment saw revenue climb 21% YoY, while IoT revenue grew by 24% [1]. The licensing segment, which includes intellectual property and patent licensing revenue, also performed well, with revenue increasing 4% YoY [1].

Qualcomm's Snapdragon Digital Chassis won several contracts in the automotive industry, with 12 new designs introduced in the quarter and 50 vehicle launches planned for fiscal 2025. The Snapdragon X Series continues to power devices from major manufacturers such as Acer, Lenovo, Microsoft, Dell, and Samsung, with over 100 designs planned for commercialization by 2026 [2].

The company also announced several strategic acquisitions and partnerships to bolster its growth in data centers and AI. Qualcomm is planning to acquire Alphawave IP Group, a leader in high-speed connectivity for data centers, AI, and networking, which is expected to close in the first quarter of 2026 [2]. Additionally, Qualcomm and Xiaomi have signed a multi-year agreement to collaborate on smartphones, with Xiaomi's Snapdragon 8-series processors powering multiple generations of flagship devices [2].

Despite these positive developments, QCOM stock has been down 3.8% year-to-date (YTD), compared to the Nasdaq Composite Index's 10.9% gain [2]. The stock currently trades at 12 times forward earnings, which is lower than its five-year historical average of 21x [2].

Looking ahead, Qualcomm expects GAAP revenue to be between $10.3 billion and $11.1 billion for the fiscal fourth quarter, with non-GAAP diluted EPS projected in the range of $2.75 to $2.95 [1]. The company's success in diversifying its product mix and customer base will be crucial, particularly in light of risks posed by U.S.-China trade dynamics and competitive pressures in the semiconductor industry.

References:
[1] https://www.aol.com/finance/qualcomm-qcom-q3-revenue-jumps-135106509.html
[2] https://www.barchart.com/story/news/34028802/is-qualcomm-the-best-semiconductor-stock-to-buy-right-now