Qualcomm forecasts revenue above estimates, betting on AI use to drive chip demand
(Reuters) -Qualcomm projected current-quarter sales above Wall Street expectations on Wednesday, wagering that growing AI capabilities in consumer devices will boost demand for its semiconductors despite ongoing global trade uncertainties.
The San Diego-based company is the world's largest supplier of modem chips that enable smartphones to connect to wireless data networks.
A major strategic concern for Qualcomm is its relationship with Apple, its top customer.
Qualcomm's shares were down about 4% in extended trading after it reiterated its warning that Apple's shift to its own modem chips in its future devices will hit its chip segment revenue.
The iPhone 16e, launched earlier this year, was the first Apple smartphone to house a modem developed in-house.
Qualcomm forecast revenue between $10.3 billion and $11.1 billion for the September quarter, compared with estimates of $10.64 billion, according to data compiled by LSEG.
The company has not seen signs of customers ordering chips ahead of normal seasonal schedules to try to get ahead of possible tariffs, Chief Financial Officer Akash Palkhiwala told Reuters in an interview.
U.S. President Donald Trump's tariff policies have so far provided exemptions for smartphones and semiconductor chips from these levies.But Trump has issued warnings about potential sector-specific tariffs targeting the industry, stating as recently as this month that he would "soon announce tariffs on semiconductors."
The tariff situation remains highly fluid and complex, with existing Chinese electronics tariffs still in effect despite the exemptions granted for certain categories.
Global smartphone shipments climbed 1% in the second quarter, according to research firm IDC, as Apple, a key Qualcomm customer, accelerated shipments to avoid potential tariff impacts.
Still, the company said its chip segment revenue from customers excluding Apple was up more than 15% so far this fiscal year.
Qualcomm CEO Cristiano Amon said he expects the company's business to supply chips to augmented-reality glasses such as Meta Ray-Bans to expand.
"We have all the designs that matter right now - the number of designs like the Meta glasses is now up to 19, and that continues to accelerate," Amon told Reuters in an interview.
Qualcomm forecast fiscal fourth-quarter chip segment sales at a midpoint of $9.3 billion, compared with analyst estimates of $9.19 billion, according to Visible Alpha data.
The chipmaker reported sales of $10.37 billion for its third quarter ended June 29, beating estimates of $10.35 billion.
The company's third-quarter adjusted profit of $2.77 per share compared with estimates of profit of $2.71 per share.
It expects adjusted profits in the fiscal fourth quarter of about $2.85 per share, above estimates of $2.83 per share.
(Reporting by Akash Sriram in Bengaluru and Stephen Nellis in San Francisco; Editing by Leroy Leo)
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