Qualcomm: Innovation Is Its Key
If you’ve followed Qualcomm for any stretch of time, you probably think of them as the go-to name for smartphone chips. Today, something bigger might be brewing and Qualcomm’s latest earnings drop gave us a closer look. Beyond stabilizing phone demand, the company has been leaning hard into AI. That push is starting to matter in a way that goes way past incremental upgrades.
Qualcomm’s quarterly results, announced at the end of April, were solid, even though the stock traded lower in response. Qualcomm beat estimates and showed signs of life in mobile, thanks mostly to China’s recovering demand. The more important development, however, was their push into on-device AI. Qualcomm’s new Snapdragon X chips, for instance, are basically tailor-made for a future where people expect their devices to be smart, responsive, and secure without sending every request up to the cloud.
Pushing AI down to the device, what the industry calls “edge AI”, means faster responses, tighter privacy and less strain on data centers. That’s good news for consumers who may want voice assistants that don’t struggle with a bad connection or cameras that recognize what they see instantly. Qualcomm is betting those features will shift from “nice to have” to “must have” a lot sooner than people think. Judging by how quickly PC makers, such as Dell and Lenovo are jumping on board with Qualcomm’s laptop chips, they might have something.
There’s also the auto angle. The Snapdragon Digital Chassis platform is getting traction with carmakers, who see software as the next big selling point. As vehicles become more computer-driven, Qualcomm’s AI-centric chips could become just as essential to a car as they are to a phone. It’s a huge market and one Qualcomm’s well-positioned to benefit from, especially as legacy automakers scramble to keep up with Tesla's innovation.
Of course, there are potential challenges. Qualcomm has been in the crosshairs of regulators investigating its licensing model and rivals, including NVIDIA and AMD, trying to get into the same space. Even though smartphone sales are mixed, it’s a mature business. It's unlikely to grow the way it did a decade ago. That’s why Qualcomm probably has to be successful with this pivot.
If they can pull it off, they’d have a foot in three big markets - smartphones, PCs, and cars - that are all demanding smarter and more capable chips.
We feel that Qualcomm still has plenty to prove, but they’re making progress. They’re developing and adapting, which is increasingly necessary in the tech space. Qualcomm’s next chapter could be looking more interesting.
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