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Wells Fargo analysts kept their rating at Equal Weight, which means they expect the stock to perform about the same as the rest of the market. However, they cut their price target from $265 to $170. This new target is much closer to the current price and sits below the average analyst target of about $205. While a lower target suggests less room for the stock to rise, the neutral rating shows the firm is not yet ready to tell investors to sell. They are likely waiting for more proof that the company can grow its automotive and PC chip sales enough to make up for a slower smartphone market.
Source: Wells Fargo
The company is facing a difficult period as the cost of memory, a key part used alongside its chips, has risen sharply. These higher costs and general supply shortages are making it more expensive to produce and sell smartphone hardware, which could leave the company with less profit on each sale for a while.
While these supply chain issues are a short-term drag, the company is focusing on moving into automotive and industrial AI markets to reduce its reliance on the phone market. This shift is important because it builds a more diverse business that isn't as vulnerable to the ups and downs of the smartphone cycle.
Source: Bloomberg Technology
Cantor Fitzgerald kept its neutral rating but lowered its target from $200 to $165. This change follows the company's recent warning that higher costs for parts and a slowdown in sales to Apple will likely weigh on profits in the near term. While the stock fell on the news, the firm is waiting for more clarity on how quickly the company can grow its newer automotive and AI businesses.
Source: Cantor Fitzgerald
Revenue for the quarter reached about 9.95 billion dollars, which was ahead of what analysts expected. However, earnings per share of $2.21 fell just short of the $2.23 target. The company is seeing strong growth in its automotive segment, which has now grown at double-digit rates for 23 quarters in a row, showing that its plan to move beyond smartphones is working.
The outlook for the next quarter is more cautious. Management expects profits to be lower than expected because of rising costs for memory parts and a faster-than-expected drop in revenue from Apple. While the long-term move into cars and AI is on track, these near-term supply chain pressures are eating into profits for now.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
BMW has signed a long-term agreement to use Qualcomm chips for its digital dashboards and advanced driver-assistance systems, which help cars with tasks like staying in lanes or parking. The deal covers vehicle platforms through the next decade, providing a steady and predictable stream of revenue.
This win is a major milestone for the automotive business. It proves that the company's technology is becoming a standard for luxury carmakers as they turn vehicles into high-tech machines. For long-term owners, this helps confirm that the company can successfully replace its slowing smartphone business with high-value automotive contracts.
Source: Reuters
Management has a long history of setting a bar they can easily clear, but a recent miss shows that rising costs are finally catching up to them.
| Expectation | |
|---|---|
| EPS | $2.18 |
| Revenue | $10.15B |