To The Moon

On Wednesday (01 May 2024), $Qualcomm(QCOM)$ reported fiscal second-quarter profit of $2.33 billion. It also reported profit of $2.06 per share. Earnings, adjusted for one-time gains and costs, came to $2.44 per share. The results exceeded Wall Street expectations. The chipmaker posted revenue of $9.39 billion in the period, which also topped Street forecasts.

Next Earnings Guidance

For the current quarter ending in June, Qualcomm expects its per-share earnings to range from $2.15 to $2.35. Qualcomm expects revenue in the range of $8.8 billion to $9.6 billion for the fiscal third quarter.

Qualcomm stock trades at just about 17x consensus 2024 earnings, which is a reasonable valuation. While this is partly because revenues and earnings are projected to only see modest growth this year, the markets project that sales will recover in FY’25.

Moreover, last year, Qualcomm announced it had extended an agreement with $Apple(AAPL)$ -0.6% to supply modem chips to the iPhone maker until 2026. The development is very positive for QCOM, given that Apple was expected to use an internally developed 5G modem chipset starting in 2024. We have a $146 price estimate for Qualcomm, which is slightly below the current market price.

So how can we find the potential opportunity to trade Qualcomm before its next earnings report for period ending June 2024.

Market Estimated Target Price (Highest)

If we look at the highest price that Qualcomm have reach, it is around %175, and it has gone as low as $141. So with this outlook for next quarter and 2024 looking good, we could take advantage of the current stock price.

But how can we trade it?

Technical Analysis For Qualcomm

We would need to look at the mid-term at least, because the plan and smartphone recovery would take time, we could see the effect of the result only in months to come.

So I would go for Mid-term and the support and resistance came in at 141.11 amd 175.72 respectively.

Qualcomm Entering and Exiting 50-day period Recently

In recent 10 trading session, we could see that Qualcomm has traded below the 50-day period for a short period, before moving back shortly, yet went below yesterday (01 May) before its earnings.

So what does this tell us? This could indicate that investors would need to see how Qualcomm is going capture the semiconductor market, and the strategy that they are going for.

Do remember that there have been a chip war, if we say there is minimal impact now, I find that it might be too early to say that.

Qualcomm MACD And KDJ Suggest Selling MIght Continue

While there have been forecast beat estimate for the next quarter, we need to be aware that even when Qualcomm is showing a ascending wedge, which mean that stock might be going in a bullish trend.

But do remember that we need to use other indicators to see whether that is true, if we looked at MACD, we could see a crossover formed few days before its earnings, and if Qualcomm continue onto this crossover, then we could see Qualcomm staying in bullish upside.

For the KDJ, there was a sudden Sell one day before its earnings, so what would need to be watched is whether the buying is coming back. This is needed to help Qualcomm stock price to push higher.

Summary

While Qualcomm has mentioned on the smartphone demand increase because of AI revival, we need to remember that AI integration and deployment need to take time.

So it might be better to monitor the price action on Qualcomm today (02 May) and take advantage if we found a good target price to enter.

Appreciate if you could share your thoughts in the comment section whether you think Qualcomm would be a good buy now and go for mid-term growth for the stock price?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.