Qualcomm advances on smartphone market revival, Chinese handset launches

Qualcomm shares rose 4 per cent on Thursday after chip designer's strong quarterly revenue forecast fanned investor optimism about a China-led recovery in smartphone market. company, biggest supplier of smartphone chips, will d around $8 billion to its market value, if gains hold.

It forecast both first-quarter sales and justed profit above market estimates on Wednesday, signaling smartphone market was picking up after a tough 2023 as consumers upgre devices for AI apps such as chatbots and im generators.

Demand has been especially positive in major market China, from which Qualcomm gets nearly half its revenue, thanks to new smartphone launches by brands such as Xiaomi, Oppo and Vivo.

"This was a nice sign that consumer was willing to spend on high-end cell phones," said Ryan Detrick, chief market strategist at Carson Group. "Improvement in Chinese market played a big role. Can that continue is big question for investors."

Qualcomm is trying to diversify its revenue as it braces for end of a lucrative tie-up with Apple , which is working on its own modem chips to replace those me by Qualcomm. While deal to keep selling chips to Apple is until at least 2026, focus is on wher Qualcomm's efforts to break into laptops and artificial intelligence in data centers will ramp up quickly eugh to offset declines in Apple revenue.

"Qualcomm is starting to enjoy ditional revenue from or markets it is focusing on including automotive, internet of things, hesets and PCs," said Bob O'Donnell, chief analyst at TECHnalysis Research.

President-elect Donald Trump has floated plans for blanket tariffs of 10 per cent to 20 per cent on virtually all imports as well as tariffs of 60 per cent or more on goods from China, in a bid to boost US manufacturing. "Higher tariffs, if y are applied to chips from Taiwan, which I would be very surprised if y happen ... that would be an incentive for Qualcomm to move manufacturing stateside," said O'Donnell.