Shares of Qualcomm Inc (NASDAQ:QCOM) are trading lower on Thursday, after the company reported its fiscal third-quarter results.
Here are the key analyst takeaways:
- BofA Securities analyst Vivek Arya maintained a Buy rating, while cutting the price target from $220 to $180.
- Rosenblatt Securities analyst Sajal Dogra reiterated a Buy rating, while lowering the price target from $265 to $235.
Check out other analyst stock ratings.
BofA Securities: Qualcomm reported its sales 4% better than consensus estimates, and its gross margin was hit by "rising input costs and fixed mobile pricing," Arya said in a note. The company’s data center progress "is promising," with both hyperscaler ASIC (application-specific integrated circuit) programs on track to generate revenue in the December quarter, he added.
"However, improved revenue visibility does not fully de-risk FY27 earnings," the analyst wrote. This is because Apple Inc (NASDAQ:AAPL) product revenues are exiting faster than expected and initial data center revenues carry "significantly lower" pro forma gross margin, he further stated.
Rosenblatt Securities: Qualcomm’s earnings guidance came below consensus, with near-term gross margin headwinds more than offsetting stronger revenue expectations, Dogra said. Although the company’s near-term visibility "remains cloudy," the latest earnings report represents "a meaningful reset," with revenue growing sequentially through fiscal 2027, he added.
The analyst noted that the focus is also on Qualcomm’s pace of margin recovery, given the following headwinds:
- Rising manufacturing and input costs
- Continued consumer headwinds within IoT
- Ramp of lower-margin Custom ASIC revenue
"Qualcomm’s double-digit pricing actions will require several quarters to fully offset these headwinds," he further wrote.
QCOM Stock Price Activity: Qualcomm shares were down 2.63% at $151.58 on Thursday, according to Benzinga Pro data.
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