Should You Buy Qualcomm Stock Before Its Nov. 4 Report?
Is the chipmaker's 11% one-day drop a chance to buy ahead of earnings?
On Oct. 30, Qualcomm's shares dropped 11%, closing at $164.79, following a broad sell-off in the semiconductor sector due to Intel's weak revenue forecast for the fourth quarter and concerns about a prolonged PC slowdown. As of the current date, Qualcomm's stock trades near $167, down around a third from its May 29 record high of $251.02.
The company is set to release its fiscal fourth-quarter results after the market close on Nov. 4. Analysts suggest focusing on the December quarter's performance rather than the September quarter's results, as Qualcomm's handset business has seen a decline in chip revenue over the past three quarters, with a 20% drop in the June quarter.
Additionally, the company expects tight memory supply and Apple's reduced share of iPhone launches to negatively impact demand. Qualcomm also anticipates a $9.7 billion to $10.5 billion revenue figure and $2.05 to $2.25 non-GAAP earnings per share in the fourth quarter, which is a 10% and 28% decline from the previous year, respectively.
However, the company's outlook includes potential revenue and sales from custom chip deals with major cloud computing companies and growth in the automotive segment. Despite a forward price-to-earnings ratio of around 17, which is slightly below the S&P 500's average, Qualcomm's stock may not reflect the potential impact of the two data center deals, whose actual revenue will not be reported until early 2027.
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