Qualcomm Trades Higher As It Forecasts Trend Toward 5G By Investing.com

By Dhirendra Tripathi

Investing.com – Qualcomm (NASDAQ:QCOM) stock rose 3% in Thursday’s premarket trading after the company forecast a more promising demand for 5G services.

The company shifted to upward bias in the forecast for shipments of 5G handsets that host its chips. 5G handset shipments in 2021 are predicted to come between 450 million and 500 million.

While much of the world is yet to experience 5G services, manufacturers are already making devices that can run on those signals. Consumers, already exposed to fast 4G services, are also willing to shift ahead of the launch of those services.

The company makes money from designing and making chips and also licensing its technologies to other equipment manufacturers in exchange for royalties.

The company’s optimistic outlook was borne out of the 63% jump in its third-quarter revenue to $8 billion. All the business lines of the company clocked healthy growth with a 43% rise in revenue from licensing being the lowest.

Revenue from handsets, the money spinner for the company, grew 57%. The company also grew its business making chips for modems and wifi equipment as demand for those devices boomed in pandemic times.  

Adjusted diluted earnings per share more than doubled to $1.92 from 86 cents and topped the analysts’ estimate of $1.68.