Qualcomm’s Stock Price Surges by 12% After Company Reports Strong Earnings

There has been a shortage of chips globally in recent months, but chip manufacturer Qualcomm has reported excellent earnings in the third quarter of the year.

Qualcomm Reports Strong Earnings

Qualcomm, one of the world’s leading chip manufacturers, reported its fiscal fourth-quarter earnings earlier today, beating analysts’ estimations. The company’s earnings soared despite the continued shortage of chips globally.

The company was expected to generate $8.86 billion and earnings per share of $2.26 during the previous quarter. However, Qualcomm trumped the estimations, with earnings per share of $2.55 and revenue of $9.3 billion.

Qualcomm’s chip business generated $7.7 billion in the fiscal fourth quarter, up by 56% from the same period last year. CEO Cristiano Amon told CNBC’s “Squawk on the Street” earlier today that supply worked exactly as planned for the company.

“Scale helps, we addressed the issue early … we put capacity plans in place, and it’s working exactly as we planned. The reality is if we look at where we are today, we had a great Q4 quarter, but we’re still short. We’re going to see supply substantially improving at the end of the calendar year as well as when we get into 2022, but there’s more demand than supply,” the CEO added.

Qualcomm has benefited from the boost in the handset business, and the CEO said the company has been focusing on that area. For the fiscal first quarter, Amon said Qualcomm would focus on growth, especially in new revenue streams and other areas outside handsets.

QCOM Surges by More Than 12%

The chip manufacturer is set to become the latest company to enter the metaverse space. The CEO said virtual reality and augmented reality devices are potential growth drivers for Qualcomm in the coming months.

QCOM is up by more than 12% since the company announced its earnings result earlier today. At the time of writing, QCOM is trading at $156.22 per share. The stock has been performing well in recent weeks, adding 23% to its value in the past month.

QCOM could rally higher over before the end of the year if the chip manufacturer maintains its level of growth as we head into the holiday period.