Why is Qualcomm rising? Executives tout diversification strategy at investor day
$Qualcomm(QCOM.US$ shares rose almost 8%, Tuesday, as the chipmaker used its investor day gathering to discuss matters such as its future business with $Apple(AAPL.US$ and a new self-driving technology deal with BMW.
Diversification was a central theme of Qualcomm (QCOM), as company officials went over details about areas such as mobile handsets, Internet of Things technologies and moves into the automotive industry.
"Demand for tech continues to accelerate," said Chief Executive Cristiano Amon. "The time for Qualcomm is now. Our technology roadmap extends to cover every growth opportunity."
As part of its diversification, Qualcomm (QCOM) announced a new deal with BMW in which the automaker will use Qualcomm's (QCOM) Snapdragon Ride chipsets for vision perception and advanced drivers assisted systems [ADAS] controllers. BMW will use the Qualcomm (QCOM) chip systems for its upcoming stack of automated driving technologies.
"This is just the beginning," Amon said. "It's an incredible opportunity to scale very fast in our auto pipeline."
Chief Financial Officer Akash Palkhiwala said that Qualcomm (QCOM) believes it can grow its automotive revenue from about $1 billion this year to $8 billion a decade from now. Palkhiwala also said that as the company grows more of its Android-based mobile business, and Apple (AAPL) develops its own chipsets, Qualcomm (QCOM) expects it will provide just 20% of the chipsets for Apple's (AAPL) iPhones by 2023.
"[For Qualcomm] 87% of our addressable market is Android," Palkhiwala said. "That’s where the market is."
Last week, a federal appeals court judge ruled that Apple (AAPL) can't revive a challenge to Qualcomm's (QCOM) mobile-phone patents due to a settlement previously reached between the companies.
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rabitter : Qualcomm announced at the meeting that it will develop SoC chips based on the ARM architecture and compete with Apple's M series chips.
John Dow : Excellent investor day from nearly all angles : Div increases to technology prowess!
If well executed, don’t see why QCOM doesn’t Hit 200 in the near future. I initially thought we’d have 200 in 2022 but I believe it’d be much sooner.
V. Long QCOM.
woodfill : Check out the Investor Day presentations (available via QCOM website). Very impressive.
Johnsh woodfill: I remember back when Q execs would never dare mention Apple's name in a presentation like this...for fear of reprisal. So nice to have them sinking to low single digits in revenue weighting in the plan.. and Q treat them just like any other customer now.
ChclABkTHD Johnsh: Great point. Seems like Apple had a sword over QCOM. Not any more, now let see how the market values the company.
fWY3TQgFdr : finally some vindication for holding and adding intermittently over the past year.
fPyTvyOaaW fWY3TQgFdr: agreed
EshoROsvP7 : The train has left the station and morphed into a rocket ship! QCOM to Infinity and Beyond!
t1i5xTWxyB : Last chance to get it at 15 forward PE....