Qualcomm appears to be the latest company getting a boost from excitement over AI. The company reported fiscal second quarter 2024 revenue of almost $9.4 billion this week, which arrived in part thanks to an AI-driven bump in smartphone sales in China, as well as growth in automotive and IoT segments.
During Qualcomm’s earnings call, CEO Cristiano Amon also hyped the role of neural processing units (NPUs) in its Snapdragon chips driving AI into more end devices, from smartphones to laptop PCs to connected cars. Speaking of cars, Qualcomm also saw strong revenue performance in the automotive sector, a promising market whose lumpy buying and inventory patterns have vexed other semiconductor companies in recent quarters.
Amon said on the earnings call, “We're enabling the ecosystem to develop and commercialize on-device gen AI applications across smartphones, next-generation PCs, extend reality devices, vehicles, industrial edge, robotics, networking, and more… As AI expands rapidly from the cloud to devices, we are extremely well-positioned to capitalize on this growth opportunity, given our leadership position at the edge across technologies, including on-device AI.”
As an example of how Qualcomm is supporting high-performing AI in such devices, Amon alluded to the NPU capabilities in the company’s Snapdragon 8 Gen 3 and Snapdragon X families, the latter of which includes the 45 TOPS NPU in the X Elite for PCs. He also noted that Qualcomm recently increased support for AI models with its launch of Qualcomm AI Hub, which is a gateway that allows pre-optimized AI models gateway to be supported on a range of devices.
Back to the fiscal second quarter 2024 performance: In Qualcomm’s QCT business, the company reported $8 billion in revenue, which included $6.2 billion in handset revenue, automotive revenue of $603 million and IoT sales of $1.2 billion. The overall QCT number was 1% higher than the same period as last year. While handset revenue grew 1% year-over-year and IoT revenue declined 11%, automotive was the star of the quarter, delivering robust year-over-year revenue growth of 35%., a trend that Qualcomm said is expected to continue in the fiscal third quarter of 2024 with an outlook for “low double-digit” percentage growth in automotive revenue.
More broadly, Qualcomm said it is expecting revenue for fiscal Q3 2024 to land between $8.8 billion and $9.6 billion, including QCT revenue of between $7.5 billion to $8.1 billion. Both forecasts seemed to encourage observers and investors, as Qualcomm’s stock price was up more than 10% at mid-day on Thursday, the day after its earnings report, to more than $181 per share.