What Happened:
Shares of wireless chipmaker Qualcomm (NASDAQ:QCOM) fell 9.4% in the afternoon session after the company reported second quarter earnings results. It provided weaker guidance for the last quarter of the calendar year 2024 due to 1) Tough comparisons from the Huawei ban and 2) Weaker demand at Android OEM due to seasonality. On the other hand, QCOM beat analysts' revenue and EPS expectations during the quarter. Guidance for the next quarter also came in ahead of expectations. Overall, it was a mixed quarter, with the markets likely struggling to digest the softer long-term guidance.
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What is the market telling us:
Qualcomm's shares are very volatile and over the last year have had 10 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago, when the stock gained 10% on the news that the company reported first quarter results that exceeded analysts' EPS expectations. Next quarter's revenue guidance came in higher than Wall Street's estimates. On the other hand, its inventory levels increased. Overall, this quarter's results seemed fairly positive and shareholders should feel optimistic.
Qualcomm is up 16.8% since the beginning of the year, but at $163.81 per share it is still trading 27.9% below its 52-week high of $227.09 from June 2024. Investors who bought $1,000 worth of Qualcomm's shares 5 years ago would now be looking at an investment worth $2,301.
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