Monitor This Important Chart Level for Qualcomm Shares
Qualcomm (QCOM) shares surged more than 4% in extended trading on Wednesday after the mobile phone chip giant reported strong earnings and issued a better-than-expected current-quarter outlook. The company’s optimistic forecast comes amid increasing demand for artificial intelligence (AI)-equipped smartphones.
Key Takeaways
- Qualcomm projects sales in the June quarter to range between $8.8 billion and $9.6 billion, with the midpoint of that guidance above analyst expectations.
- The company reported a 40% increase in revenue from Chinese phone manufacturers.
- Investors should monitor how Qualcomm’s share price reacts to two twin peaks that formed in March and April around $176.
Strong Demand From China
Despite expectations of declining handset revenues in the current quarter due to fewer smartphone launches over the summer, Qualcomm remains encouraged by robust demand for premium tier smartphones that require advanced chips. The company noted a significant 40% increase in revenue from Chinese phone manufacturers compared to the previous year.
Qualcomm CEO Cristiano Amon highlighted the strength in the Android premium market in China, particularly citing brands like Oppo, OnePlus, and Vivo as driving forces behind the increased demand for premium devices.
Amon also emphasized the role of next-generation handsets equipped with AI and generative AI in fueling the demand for premium smartphones. The incorporation of on-device AI and Gen AI in premium devices has resonated well with consumers, leading to increased interest in these advanced technologies.
Price to Watch Amid Earnings-Driven Buying
Qualcomm shares have been on an upward trend since the 50-day moving average crossed above the 200-day moving average, signaling a bullish golden cross pattern. The recent retracement below the 50 MA saw immediate buying interest, indicating strong underlying support for the stock ahead of the company’s quarterly results.
Investors are advised to keep a close eye on how Qualcomm’s share price reacts to the twin peaks around $176 that formed in March and April. A breakout above this level could potentially signal a continuation of the multi-month uptrend that began in late October.
In after-hours trading, Qualcomm shares rose 4.1% to $170.77. Over the past year, the stock has gained approximately 41%, reflecting investor confidence in the company’s growth prospects.
Disclaimer: The views and opinions expressed in this article are for informational purposes only. Readers are advised to conduct their own research before making investment decisions.
As of the date of writing, the author does not hold any positions in Qualcomm or related securities.
Original Source: Investopedia
