Qualcomm Will Benefit From Edge AI Strength In Smartphones And PCs, Analyst Says
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 14 2024
0mins
Source: Benzinga
Qualcomm's Market Performance: Qualcomm shares are down 1.92% at $166.22, despite an Overweight rating and a $225 price target from KeyBanc Capital Markets due to strong positioning in AI for smartphones and PCs, as well as growth in the auto sector.
Financial Results and Guidance: Qualcomm reported Q3 revenues of $9.4 billion, exceeding estimates, with EPS of $2.33. However, guidance for Q4 indicates potential challenges, including the impact of losing its license to sell to Huawei, projecting revenue between $9.5 billion and $10.3 billion.
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Analyst Views on TSM
Wall Street analysts forecast TSM stock price to fall
8 Analyst Rating
7 Buy
1 Hold
0 Sell
Strong Buy
Current: 425.830
Low
63.24
Averages
313.46
High
390.00
Current: 425.830
Low
63.24
Averages
313.46
High
390.00
About TSM
Taiwan Semiconductor Manufacturing Co Ltd is a Taiwan-based integrated circuit foundry service provider. The Company is primarily engaged in integrated circuit manufacturing services. It offers advanced process technologies, specialised process solutions, advanced photomask and silicon stacking, and packaging-related technologies, while supporting a comprehensive design ecosystem. The Company's products serve diverse electronic sectors including artificial intelligence, high-performance computing, wired and wireless communications, automotive and industrial equipment, personal computing, information applications, consumer electronics, smart internet of things, and wearable devices.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Manufacturing Diversification: This partnership will aid Apple in diversifying its manufacturing base, reducing reliance on TSMC, whose advanced production lines are in high demand from AI chipmakers like Nvidia and AMD.
- Increased Chip Capacity: By collaborating with Intel, Apple is expected to enhance its chip capacity to meet the growing market demand, particularly in the AI and high-performance computing sectors.
- Strengthened Market Position: This move not only bolsters Apple's competitiveness in chip manufacturing but also potentially provides stronger technical support for future product innovations, further solidifying its market position.
See More
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- Insufficient Investment: Although Indian startups raised $10.5 billion last year, most funding went to enterprise applications, retail, and fintech, leaving deep-tech companies underfunded and limiting their capacity for technological innovation and development.
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- New Business Expansion: Intel is developing its foundry business to manufacture chips for third-party customers, and Cramer notes that with surging AI spending, more chip designers will seek U.S.-based alternative suppliers, potentially increasing Intel's market share.
- Optimistic Market Outlook: Cramer emphasizes that despite Intel's significant stock price increase, its prospects in the data center hardware sector remain optimistic, suggesting that investors should focus on future growth potential rather than past performance.
See More
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- Significant Market Share Advantage: Nvidia commands 86% of AI revenue in data centers, far surpassing its closest competitor AMD at 7%, which positions the company favorably in the AI sector and allows it to maintain a competitive edge in future technological advancements.
- TSMC's Manufacturing Leadership: Taiwan Semiconductor manufactures 68% of the world's processors and 90% of advanced processors, with Q1 revenue rising 41% to nearly $36 billion, showcasing its robust manufacturing capabilities in the AI processor market and expected continued benefits from future demand.
- Relatively Undervalued Stock: Both Nvidia and TSMC have P/E ratios of 32 and 38, respectively, which are below the tech sector average, making their stocks appear relatively cheap in the current market environment, suggesting that long-term holding could yield substantial returns for investors.
See More
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- Tech Giants Restructuring: Cramer noted a reordering of the 'Magnificent Seven,' with newcomers like SpaceX and the yet-to-go-public Anthropic and OpenAI emerging as formidable competitors, indicating intensified market competition, especially in the AI sector.
- Strengths of Alphabet and Apple: Alphabet is positioned advantageously in the AI era with its YouTube and Waymo businesses, while Apple leverages its ecosystem of over 2.5 billion iPhone users to strengthen its AI partnership with Alphabet, showcasing both companies' robust market positions.
- Market Dynamics and Investment Strategy: Despite challenges faced by Meta and Microsoft, Cramer advises maintaining investments in Amazon and Nvidia, believing that the latter's GPU demand will continue to grow, and that Amazon's cloud business remains highly profitable.
See More
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- Samsung Collaboration Potential: Samsung Electronics is in talks with companies including AMD, Alphabet, BYD, and Tesla about future chip production, which could provide AMD with more production capacity to meet increasing demand, particularly in AI-related products.
- TSMC Capacity Constraints: The report highlights that much of Taiwan Semiconductor Manufacturing Company's leading-edge capacity is already booked, reminding investors that only a few companies can produce the most advanced chips at scale, thereby enhancing Intel's strategic importance in expanding its foundry business.
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