Technology company Qualcomm (#QUALCOMM) which manufactures semiconductors, software and services related to wireless technology, will report its financial results for the second quarter of the 2021 fiscal year on Wednesday, April 28, 2021, following market close.
Qualcomm has captured the great opportunity of the industry-wide shortage of semiconductor supplies, leveraging their reach and working across global supply chains to maximize their capabilities. Overall, the company’s Q1 2021 revenue was $7.93 billion above consensus of $7.62 billion and positive earnings per share (EPS) was at $1.90 adjusted vs $1.67 per share expected by analysts. Revenue grew 52% year-on-year in the quarter.
Qualcomm derives most of its revenue from handset chips and 5G network deployments plus royalties on mobile handset patents. Qualcomm CDMA Technologies’ larger segment, which includes handsets as well as radio frequency front end, internet of things and automotive components, further created growth opportunities for the company for the second quarter, especially as the economy reopened and people started to travel more. With Qualcomm acquiring chip start-up Nuvia for $1.4 billion and partnering with Nokia and US Cellular to start field trials of 5G mmWave solutions in commercial networks, this kind of technology collaboration is likely to have translated into top-line growth.
For this quarter’s report, the company is expected to have recorded higher year-over-year revenue, driven by the increase in 5G-capable chips and strength in its Snapdragon 888 Plus portfolio (an upgraded version of Snapdragon’s 5G mobile platform). The company continues to leverage advanced radio frequency (RF) front-end solutions for high-performance 5G devices. Leveraging AI capabilities, Snapdragon 888 Plus helps run multiple networks simultaneously for an immersive entertainment experience with noise canceling features to drown out unwanted noise. The company also unveiled the Snapdragon 778G 5G Mobile Platform, which has been specifically designed to deliver enhanced mobile gaming and video experiences on the back of artificial intelligence technology.
The Zacks consensus forecast for revenue is pegged at $7.5 billion, representing a 54% growth from the figure reported last year’s quarter. The consensus estimate for adjusted earnings per share is pegged at $1.67, which represents a 94.2% increase. Qualcomm has a Zacks Rating #3 (hold).
The movement of #QUALCOMM in the first three months of 2021 has corrected up to 38.2% FR (4476 points) from the March 2020 low price measurement (58.00) to the peak of January 2021 (167.91). In the 2nd quarter (Apr-Jun) equity value strengthened 6.83% below the increase in the same quarter of 2020 (+36.84%) and 2019 (+32.12%). Although the percentage increase is lower than the same two l quarters last year, this can be understood from the sharp increase in the stock price value during the Q2-Q4 2020 recovery period which has provided large capital gains for investors. The total increase in stock prices from Q2 2020 to Q2 2021 is still recorded at around 114%.
The current price is recorded at 144.93, equating to the position of the resistance price of 144.90. A further rally would return some of the early year losses, to return to the January 2021 open at 154.12 and the resistance peak at 167.91. This is not without reason, as the support from the moving average is still above the 26-day, 50-day and 200-day EMAs and the RSI has not shown signs of being overbought yet. At the bottom, there is an immediate support at 136.80 which is likely to hold the correction pace. The 200-day EMA (red line) will act as the average dynamic support in the range of 132.50.
Ady Phangestu
Market Analyst
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