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What Would Excite Qualcomm Investors in Q4 2018?

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Qualcomm’s fourth-quarter earnings might not be exciting

Semiconductor companies’ third-quarter earnings results have been somewhat mixed. Intel (INTC) and Xilinx reported strong earnings results, whereas TSMC, Texas Instruments, and Advanced Micro Devices reported demand weakness.

The next big semiconductor earnings results will be those of mobile chip giant Qualcomm (QCOM), which is set to release its earnings results for the fourth quarter of fiscal 2018 on November 7. Like many chip companies, Qualcomm could report weak earnings and guidance, as it recently lost Apple’s (AAPL) modem business to Intel.

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Qualcomm stock has already fallen 14% in October, and it’s likely to fall further when its earnings are announced, as traders might react negatively to its weak earnings figures. However, long-term investors may want to keep an eye on the stock, as the company has some major growth opportunities coming up in 2019.

5G

Qualcomm has been investing in 5G (fifth-generation) technology for quite a long time, and its efforts could start to pay off from 2019 onward as 5G deployments begin. In fact, Xilinx and Texas Instruments have already started to witness demand from early 5G networks. Qualcomm is leading in the 5G space in terms of the many industry-first innovations that are necessary for 5G deployment, such as 5G antenna modules and 5G modems, to enable handset makers to launch 5G smartphones in 2019.

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Alexa Headphones

In collaboration with Amazon (AMZN), Qualcomm has developed a platform that would bring the latter’s smart assistant, Alexa, to wireless headphones. These headphones can be connected to Android smartphones, increasing the reach of Alexa beyond Bluetooth speakers. It remains to be seen whether these headphones will be received well by the market.

Snapdragon SoCs

Qualcomm has launched the Snapdragon 675 SoC (system-on-chip), which brings high-end features, such as gaming, enhanced camera functions, and AI capabilities, to mid-range phones. The company is also expected to launch its next-generation flagship Snapdragon 8150 SoC on TSMC’s (TSM) 7 nm (nanometer) node.

In this series, we’ll look at each of these developments and other factors that could influence Qualcomm’s fiscal 2019 earnings.

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