Chip manufacturer Qualcomm predicted on Wednesday that fourth-quarter revenue will exceed Wall Street's expectations, primarily due to strong demand for high-end Android devices and increased need for chips due to AI upgrades in smartphones.
Headquartered in San Diego, California, Qualcomm saw its stock price rise more than 5% in extended trading after announcing earnings. However, the stock fell by 1.4% as the company noted that the U.S. had revoked an export license to the sanctioned Chinese telecom company Huawei.
Stricter export restrictions and escalating U.S.-China trade tensions are hindering chipmakers from serving one of the world’s largest semiconductor markets, China.
Qualcomm's Chief Financial Officer Akash Palkhiwala stated in an earnings call, "This change will impact our revenue for this quarter and the first quarter of fiscal year 2025," without specifying the exact impact.
The president of Qualcomm's licensing division, Alex Rogers, said the company will continue negotiations with Huawei.
In early May, the company had indicated that it did not expect to receive any chip revenue from Huawei after 2024 but was engaged in licensing negotiations with the Chinese company.
The warning about trade restrictions overshadowed Qualcomm's optimistic forecast. The integration of AI functions into smartphones has driven a recovery in end-market demand, boosting Qualcomm's orders after the industry had slumped to its lowest point in years.
