Qualcomm Shares Rise 8% Amid Positive Q1 Outlook

(Reuters) – Qualcomm (NASDAQ:QCOM)'s shares rose more than 8% on Thursday after the company forecast first-quarter results ahead of Wall Street estimates. The chip designer is benefiting from a recovery in the smartphone market and the launch of new Chinese handsets.

The company expects sales and adjusted profit for the first quarter, covering the holiday shopping season, with a midpoint of $10.90 billion and $2.95 per share. In comparison, the average analyst estimates were $10.59 billion and $2.86 per share, according to data compiled by LSEG.

Nvidia (NASDAQ:NVDA) and Intel (NASDAQ:INTC) saw marginal increases in pre-market trading on Thursday.

TD Cowen analysts mentioned, "We're encouraged by … what appears to be a stabilized handset backdrop and ongoing diversification outside of handsets."

Qualcomm has a deal to sell chips to Apple (NASDAQ:AAPL) until at least 2026. Analysts are interested in whether Qualcomm's efforts to penetrate the laptop and AI markets will ramp up quickly enough to offset declines in Apple revenue.

The company is benefiting from a smartphone market recovery as consumers upgrade devices for AI applications, including chatbots and image generators. Qualcomm's handset business received a boost in the fourth quarter from new smartphone launches in China, with 46% of its revenue for the most recent fiscal year coming from customers based in the country.

As of Wednesday's close, Qualcomm's shares have risen 19.6% this year, while Nvidia's shares have nearly tripled and Intel's stock has slumped 50.2%.