Qualcomm Shares Hit Record High After Company Says This

Qualcomm, a wireless chip and processor supplier for mobile phones, saw its shares explode on Tuesday after the company revealed that it will grow even without Apple.

The company’s stock closed up 7.9% Tuesday after it issued bullish forecasts at an investor’s conference in New York.

Qualcomm had announced on Tuesday that it had diversified its business and predicts that it will only supply 20% of the modem chips Apple needs for the 2023 iPhone.

The company said that its growth doesn’t rely on a relationship with any single customer, such as its modem chip sales to Apple.

“This company can no longer be defined by a single market and a single end-customer,” Qualcomm CEO Cristiano Amon remarked.

Company officials declined to say what percentage of its current revenue comes from Apple but Qualcomm had reported $27 billion in total chip sales in 2021.

Qualcomm said it expects its entire chip business, called QCT, will grow at least 12% by 2024 even as it predicts its business with Apple declines to a “low single-digit” percent of sales in
its chip business by the end of 2024.

“As we continue to invest in leading RF front end technology, there’s opportunity to supply to Apple. But as it relates to Apple, we don’t make any assumptions other than the assumptions we have in the plan,” Amon explained. “So everything on Apple, we should think about upside.”

Company CFO Akash Palkhiwala said the company’s primary strategy in phones is to power high-end Android devices.

“The potential for Apple to eventually internalize their own chipsets remains an overhang on the stock’s multiple, and we believe many investors are looking for some sort of clarity on the level of earnings power they might underwrite without Apple chips in the model,” Bernstein analyst Stacy Rasgon wrote this week.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.