Qualcomm stock hits record high after it says it will grow without Apple

Cristiano Amon, CEO of Qualcomm.

Steve Marcus | Reuters

Qualcomm stock rose as much as 7% on Tuesday after it issued a bullish outlook at an investor conference in New York and said its growth is not dependent on a relationship with any one customer, such as Apple’s modem chip sales.

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

Qualcomm currently provides wireless chips for Apple devices, but has said it expects to supply only 20% of the modem chips needed for the iPhone 2023. Company officials declined to say what percentage of its current revenue comes from Apple. The company announced $27 billion in total chip sales in 2021.

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

“As we continue to invest in front-end RF technology, there is an opportunity to supply Apple. But as it relates to Apple, we are not making any assumptions other than the ones we have in the plan,” Amon said. “So it’s all on Apple, we have to think about the upside.”

An Apple representative did not immediately respond to a request for comment. Apple bought the modem business from Intel in 2019 and is working on its own 5G wireless technology but has not publicly discussed its modem plans.

Qualcomm’s chief financial officer, Akash Palkhiwala, said the company’s primary strategy in phones is to run high-end Android devices.

Analysts have been looking for these indicators from Qualcomm as the company’s investor day approaches.

“The prospect of Apple eventually absorbing its own chipset remains a huge burden on the stock multiplier, and we think many investors are looking for some sort of clarity on what level of earnings strength they might guarantee without Apple chips in the model,” Bernstein said. Stacy Rasgon wrote in a note on Monday.

While Qualcomm is best known as a supplier of wireless chips and processors for mobile phones, it said it has diversified its business and that more than a third of its sales are now driven by chips that power other types of devices, such as personal computers, cars and virtual reality headsets.

For example, Qualcomm also said that sales of IoT chips, the low-power chips needed for smart devices, will reach $9 billion by 2024, up from $5.06 billion in 2021.

Similarly, the company said on Tuesday that its auto business could reach $8 billion in sales in the next 10 years, up from less than $1 billion in 2021. Part of that will be achieved through a new partnership with BMW where Qualcomm will provide chips for itself. – Driving cars.

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