QUALCOMM INC/DE QCOM

Qualcomm is highly optimistic about the growing edge AI opportunity, particularly as AI models become smaller and more efficient, enabling them to run directly on devices. DeepSeek-R1-Distill models, for instance, were running on Snapdragon-powered smartphones and PCs within days of release. The company anticipates a shift where AI inference increasingly occurs on-device, making AI more accessible and driving demand for Qualcomm platforms across various devices due to its leadership in high-performance, efficient AI processors for the edge.

The recently launched Samsung Galaxy S25 series is globally powered by the Snapdragon 8 Elite for Galaxy, integrating advanced AI features like Galaxy AI and Google Gemini. This contributed to record QCT handset revenues of $7.6 billion, a 13% YoY increase. Strong design traction and end-customer demand for Snapdragon 8 Elite-powered flagship smartphones from Chinese OEMs also played a significant role, reinforcing the long-term trend of premium-tier growth in the smartphone market.

Qualcomm's design win momentum in PCs has accelerated, with over 80 designs in production or development on Snapdragon X Series platforms, targeting more than 100 commercialized devices through 2026. The new Snapdragon X platform, designed for the $600 price range, expands the addressable market without compromising AI capabilities. Consumer reception has exceeded expectations, with Snapdragon X Series achieving over 10% share of Windows laptops priced above $800 in U.S. retail in December.

The company delivered its sixth consecutive quarter of record QCT automotive revenues, reaching $961 million, a 61% YoY increase. This growth is driven by increased content in new vehicle launches and automakers deploying high-performance computing and connectivity chips. New collaborations with partners like Alps Alpine, Amazon, Google, Leapmotor, Mahindra, and Hyundai Mobis utilize Snapdragon Digital Chassis solutions to power AI-driven in-cabin and advanced driver assistance systems.

IoT revenues grew 36% YoY to $1.5 billion, fueled by new product launches across consumer, networking, and industrial segments. Qualcomm introduced its AI on-prem appliance and inference suite, enabling generative AI inference and computer vision workloads on dedicated on-premises hardware, with initial partners including Honeywell and IBM. The company also announced the evolution of Qualcomm Aware, a cloud-based asset visibility platform, further expanding its horizontal enablement offerings.

Qualcomm's QTL business is well-positioned to maintain its fiscal '24 revenue scale in fiscal '25, having extended key agreements with major OEMs and nearing execution of new long-term license agreements with two additional large OEMs. The company also signed Transsion to a long-term 4G license. Furthermore, the jury's verdict in the ARM vs. Qualcomm trial vindicated Qualcomm's CPU innovations and affirmed its license for proprietary Oryon CPUs across various industries.