0.9 C
New York
Friday, February 3, 2023

Buy now

Wall Street sees little reprieve from Qualcomm’s smartphone gloom

At least 14 brokers lowered their price targets on the largest maker of smartphone chips on Thursday.

Sales at Qualcomm Inc are slowing as the smartphone market faces its worst contraction in years, and Wall Street analysts don’t expect this to change anytime soon.

At least 14 brokers on Thursday slashed their price targets for the largest smartphone chip maker after it forecasted $2 billion below market estimates and said it had additional inventory that could take half a year to clear.

Shares, which have already lost more than a third of their value in 2022 so far, fell nearly 8% before the bell.

“We believe that a weak market and even a possible stock correction probably wasn’t entirely unexpected, although the magnitude is likely worse than some might have imagined,” Bernstein analysts wrote in a note.

The company’s bleak outlook for the holiday quarter underlines the rapid decline in the smartphone market, as strict COVID-19 restrictions undermine demand in top market China and a global rise in inflation weighs on consumer spending elsewhere.

The chipmaker expects a low-double-digit percentage decline in handset sales volumes this year, compared to its earlier forecast for a mid-single digit decline.

“Qualcomm’s smartphone business is positioned more in the mid-market… and the mid-market is currently the most affected segment in the smartphone market,” said Canalys research analyst Runar Bjorhovd.

“The outlook for the rest of the year remains pessimistic, but there is hope that demand will pick up again by mid-2023,” Bjørhovd added.

However, there are some bright spots.

Qualcomm expects to have the vast majority of its 5G fashion month before the iPhone’s 2023 launch, compared to a previous estimate of 20%. Turnover from new areas of focus such as automotive equipment, networks and computers is also increasing.

Source link

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected


Latest Articles