Chipmaker Qualcomm (QCOM) on Tuesday outlined plans to diversify its enterprise from smartphones as main buyer Apple (AAPL) transitions to its personal wi-fi chips. Qualcomm inventory rose on the information.
At an investor occasion in New York Metropolis, Chief Government Cristiano Amon mentioned the corporate’s whole addressable market will improve from $100 billion at the moment to $700 billion within the subsequent decade. The expansion comes from Qualcomm increasing into chips for cars and Web of Issues units for shopper and industrial purposes.
“We’ll all the time be the corporate defining the tempo of innovation in cellular,” Amon mentioned. “However we’re not outlined by a single finish market and a single buyer relationship.”
Within the smartphone house, Qualcomm now could be centered on supplying modems and different chips for high-end Android handsets from Samsung and Chinese language distributors.
Qualcomm Inventory Extends Breakout
In the meantime, the corporate is diversifying its enterprise into markets resembling automotive, cellular computer systems and wearables, Amon mentioned. It’s making central processing models, graphics processing models and synthetic intelligence chips for units on the sting of networks.
“We are actually diversified throughout many giant addressable markets,” he mentioned.
In afternoon buying and selling on the inventory market at the moment, Qualcomm inventory superior 6.5%, close to 179.40. In intraday buying and selling, it notched an all-time excessive of 180.50.
On Nov. 5, Qualcomm inventory broke out of a 40-week consolidation sample at a purchase level of 168.04, in line with IBD MarketSmith charts. The breakout occurred two days after Qualcomm reported fiscal fourth-quarter outcomes. The 5% purchase zone extends to 176.44, based mostly on IBD buying and selling pointers.
Automotive Market Progress
Within the automotive market, Qualcomm is working with 25 carmakers. On Tuesday, BMW Group (BMWYY) chosen Qualcomm to supply know-how for its superior driver-assistance methods and automatic driving platform.
Qualcomm will increase its attain within the automotive market with the deliberate buy of Veoneer (VNE). On Oct. 4, Qualcomm and funding agency SSW Companions introduced a deal to purchase Veoneer for $4.5 billion. After the deal closes, Qualcomm will take over Veoneer’s Arriver enterprise and SSW will get the remainder of the automotive security firm. Arriver makes laptop imaginative and prescient, drive coverage and driver help methods.
The quantity of laptop chips in cars is exploding, Amon mentioned. Along with chips for superior driver-assistance methods and autonomous driving, Qualcomm is making chips for digital cockpits and wi-fi connectivity, he mentioned.
Qualcomm ‘Will Allow The Metaverse’
In shopper units, Qualcomm hopes to realize an even bigger share of chips for pocket book computer systems as these units shift to Arm-based processors.
Plus, Qualcomm sees a giant alternative in offering chips to energy digital actuality and augmented actuality headsets, Amon mentioned.
“Blended actuality, XR (prolonged actuality), digital actuality and augmented actuality is the subsequent computing platform,” he mentioned. “We are going to allow the metaverse.”
Qualcomm inventory ranks No. 15 out of 32 shares in IBD’s fabless semiconductor business group, in line with IBD Inventory Checkup. It has an IBD Composite Ranking of 96 out of 99.
Comply with Patrick Seitz on Twitter at @IBD_PSeitz for extra tales on shopper know-how, software program and semiconductor shares.
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