Strong diversification and capital returns highlight the quarter, but macroeconomic concerns and tariff threats cloud outlook
Qualcomm Incorporated (QCOM) reported strong second-quarter results for fiscal 2025 on Tuesday, driven by a surge in its automotive and Internet of Things (IoT) business segments. The San Diego-based chipmaker posted GAAP revenues of $11.0 billion and earnings per share (EPS) of $2.52, beating Wall Street expectations. On a non-GAAP basis, EPS came in at $2.85.
The company’s QCT (Qualcomm CDMA Technologies) segment, which includes smartphone chips and other semiconductors, saw earnings before tax (EBT) rise by 25% year-over-year. Importantly, Qualcomm’s efforts to diversify its revenue base beyond mobile phones are beginning to pay off. Combined revenues from its automotive and IoT businesses jumped 38% compared to the same quarter last year.
“We are pleased to report another quarter of strong results,” said Cristiano Amon, Qualcomm’s President and CEO. “As we navigate the current macroeconomic and trade environment, we remain focused on the critical factors we can control – our leading technology roadmap, best-in-class product portfolio, strong customer relationships and operational efficiencies.”
Despite the solid performance, Qualcomm struck a cautious tone regarding the quarters ahead. The company forecast third-quarter revenues in the range of $10.1 billion to $10.5 billion, with a midpoint of $10.3 billion—slightly below analysts’ average estimate of $10.35 billion, according to LSEG data. Qualcomm expects adjusted EPS between $2.60 and $2.80, with the midpoint slightly exceeding the Wall Street consensus of $2.67.
Concerns stem from tepid global smartphone demand and ongoing trade tensions. Qualcomm’s chips have so far been excluded from former President Donald Trump’s steep tariffs on Chinese imports, but the company is still vulnerable due to its heavy exposure to China—its largest market, accounting for 46% of sales in the previous fiscal year.
While the Biden and Trump administrations have granted temporary exclusions to smartphones and chipsets, future tariffs remain a looming threat. Trump has recently hinted at sector-specific levies targeting the semiconductor industry, which could directly impact Qualcomm’s future earnings and supply chain dynamics.
Adding to the complexity, global smartphone shipments rose a modest 1.5% in the first quarter of 2025, according to IDC. Apple, one of Qualcomm’s largest customers, reportedly front-loaded shipments in anticipation of possible new tariffs.
In a positive sign for shareholders, Qualcomm returned $2.7 billion during the quarter, including $938 million in dividends and $1.7 billion in stock buybacks. The company repurchased 11 million shares, reinforcing its commitment to returning value to investors.
Despite headwinds, Qualcomm’s diversification strategy and strong execution in non-smartphone segments provide a buffer against volatility in its core mobile business. Investors and analysts alike will be watching how the company navigates the evolving trade environment and shifts in global demand.
As CEO Amon put it, “With our strong foundation and continued investment in innovation, we are well-positioned to drive long-term value across our business.”
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