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Qualcomm (QCOM) is set to release its third quarter 2025 revenues after the market closes on July 30th, and Wall Street is hoping for another meticulous update from chipmakers at the heart of global 5G and AI buildouts. Analysts forecast an adjusted EPS of $2.71, an increase of 16.3% from a year ago, earning $10.34 billion, reflecting a 10.1% increase from the previous year. Investors are also seeing advances in diversification into the core smartphone business of Qualcomm, as well as the automotive, IoT and Edge AI. The results came amid a scrutiny of intellectual property rules under the Trump administration and a permanent macro headwind that has slowed demand for mobile phones in conjunction with tariffs.
Qualcomm delivered $10.8 billion in revenue and $2.85 non-GAAP EPS with a strong show from the automotive segment (+59% previous years) and IoT (+27% previous years). Mobile phone revenues rose 12% year-on-year to $6.9 billion, indicating resilience in a market where many fear that they are stagnating. Management reiterated its long-term ambitions to drive third-quarter revenues of $9.9 billion to $10.7 billion and $2.60 to $2.80 EPS, releasing its long-term ambitions to drive $22 billion of non-handset revenues by fiscal year 2029.
The key indicators to watch tonight start with the demand for smartphones. Qualcomm continues to be a leading supplier of premium tier Android chips, but competition is growing. Analysts expect a modest mobile phone revenue growth of around 10%, but the driving force behind Apple's development of its own in-house modem chip and Huawei's revival poses structural risks. Susquehanna recently flagged adoption of 5G and Wi-Fi 7, which is weaker than expected, as low-end launches dominated. Still, Qualcomm's premium layer attachment rate remains a key driver for margins.
Beyond mobile phones, investors will focus on Qualcomm's fastest-growing sector: automobiles and IoT. Automotive revenues were closer to $1 billion in the last quarter, along with an increase in Snapdragon content for next-generation vehicles. IoT provided $1.6 billion in the second quarter, supplying industrial and connectivity demand. Analysts are looking for 15-20% growth in these areas in the third quarter. Progress here is key to demonstrating Qualcomm's diversification away from cyclical mobile phone dependence.
AI integration is another major theme. Qualcomm's acquisition of Alphawave Semi is a $2.4 billion deal announced earlier this month, supporting its position in AI ASIC development, particularly for its high-speed interconnect and chiplet-based design. Keybanc called the move a positive step towards expanding Qualcomm's reach in data centers and AI inference markets. The acquisition is expected to be a slightly diluted short-term, but analysts claim it will increase its long-term competitiveness against Nvidia and other custom silicon players.
Geopolitics remains an impending risk. Qualcomm is drawing massive revenues from China where tariffs and trade tensions under the Trump administration could disrupt demand. A report this week shows the administration is considering licensing rules that could affect Qualcomm's licensing business. Although details remain sparse, the market has shown sensitivity to such headlines, indicating that Qualcomm stocks will be temporarily immersed after the news breaks.
From a market perspective, there is a mix of emotions towards revenue. Meanwhile, Qualcomm estimates 88% of the time over the past two years with an EPS estimate of 100% time and revenue. Meanwhile, the stock has historically struggled with post-revenue, finishing low in the next day's session after four quarterly reports over the past year, including a decline of 8.9% in May. Options traders are priced at 9% this time. The average swing over the two years was 6.3%.
Analysts remain divided. Bofa points out the headwinds of recent years, but repeats the purchase with a $200 goal, citing an undervaluation at just 12x P/E against the historic 15-18x range. Stacey Lasgon of Bernstein also considers Qualcomm “unfairly sold,” pointing to strong business momentum and strategic M&A. Meanwhile, Seaport has been downgraded to neutral, warning that smartphone maturity and Apple's modem transition will limit excitement in the short term.
Comparison with the previous quarter provides useful context. The second quarter showed a $10.8 billion recurring revenue, down from $11.7 billion due to normal seasonality, but automobiles and IoT remained bright spots. Management's tone highlighted CEO Cristiano Amon's ability to consistently predict and hit targets. Tonight, investors will measure whether that consistency will persist in macro noise.
Technical traders have been experiencing resistance at $162 since early June, with support of around $153, supporting a 50-day moving average. Since the start of the year, stocks have risen 5.7%, delaying Nvidia and other AI-led peers. The call is extraordinarily popular, with a 50-day call-to-put ratio of 2.26, reflecting the rise in bullish speculation heading towards profits.
Tonight's stakes are clear. Qualcomm must prove that it can balance the mature mobile phone market with the robust growth of the automobile, IoT and AI. Investors will also analyze commentary on patent investigations of tariffs, Chinese demand, and cues on macro exposure. Qualcomm's report is in a market where liquidity expectations are improving, as CME Fed Funds Futures shows the possibility of a September interest rate cut in December and another 65% chance, but execution is a top priority.
Conclusion: If Qualcomm achieves smartphone stability and double-digit growth in automobiles and IoT, it could strengthen trust in its diversification strategy. However, cracks in handset guidance and tariff commentary could once again test investor patience.
