Qualcomm Profits Soar On AI Chip Boom As Snapdragon X Disrupts PC Landscape

Qualcomm sign in front of a building (obstructed by trees) on a sunny day.
Qualcomm has reason to strut around like a peacock after posting its latest earnings report, which reflected just shy of $9.3 billion in revenue for the second quarter of 2024, and net income of $2.3 billion. While the former is just a 1% jump from the same quarter a year ago, Qualcomm's net income is up significantly, to the tune of 37% year-over-year.

"We are pleased to report strong quarterly results, with EPS exceeding the high end of our guidance," said Cristiano Amon, President and CEO of Qualcomm Incorporated. "We are excited about our continued growth and diversification, including achieving our third consecutive quarter of record QCT Automotive revenues, upcoming launches with our Snapdragon X platforms, and enabling leading on-device AI capabilities across multiple product categories."

Qualcomm slide showing its Q2 2024 revenue highlights.

Qualcomm's performance in the second quarter exceeded Wall Street's expectations. Investors reacted positively to the news by pushing the company's stock price up by as much as 4.9% in extended trading hours, to $172 per share. At the time of this writing, Qualcomm's share price ahead of the opening bell is hovering close to $171.

Not surprisingly, the bulk of Qualcomm's revenue came from chips intended for handsets, which contributed $6.18 billion to its bottom line. Qualcomm says its flagship Snapdragon 8 Gen 3 SoC in particular is seeing "strong demand globally," especially in China where revenue from Chinese OEMs skyrocketed 40% year-over-year in the first half of 2024.

Qualcomm slide on projecting $45 billion for its automotive solutions.

Meanwhile, Qualcomm's chips for IoT devices clocked in at $1.24 billion, which is down 11% year-over-year, while its automotive hardware accelerated 35% to $603 billion for the quarter. As it applies to the latter, while it is the most modest tally of the bunch, Qualcomm says it is "growing faster than the addressable market" and expects revenues to top $4 billion in 2026, with a design-win pipeline boosting to $45 billion.

"From an automotive perspective, as you know, we've given out a target of greater than $4 billion revenue in fiscal '26. And what you're seeing is really our design win pipeline materializing into revenue on our way to that number. And so that's the framework as to how I think about it," Akash Palkhiwala, chief financial officer and chief operating officer Qualcomm said during an earnings call.

Qualcomm finds itself in a promising position. It already dominates the smartphone scene with practically every Android phone being powered by its Snapdragon hardware, especially in the premium space. But it's also making a more spirited push in the PC space with its latest Snapdragon X platforms, including Snapdragon X Elite and Snapdragon X Plus, driven by demand for on-device AI and long battery life.

Qualcomm slide showing QCt AI PC highlights.

"We have a lot of product momentum right now and especially with all the launches, I would encourage everybody to go watch the Microsoft Build event, especially or what is happening with on device AI. There's a lot of product momentum and launches. As those devices started ramp up in volume. And since a lot of them are going to be back to school, it's going to be more of a fiscal '25 event in terms of being material within the IoT segment," Qualcomm president and chief executive officer Cristiano Renno Amon added.

Amon went on to say that as Qualcomm enters the PC market more earnestly, "AI and the ability to run on-device AI better than any of our peers on a laptop" is "going to be a tailwind." And in one of Qualcomm's presentation slides, it boasts how it "continues to disrupt the PC market" with its latest Snapdragon X platforms.

Looking to the next quarter, Qualcomm anticipates (PDF) revenues landing between $8.8 billion and $9.6 billion.