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Qualcomm (NASDAQ:QCOM) shares sank more than 8% on Thursday morning after the chipmaker issued a tepid revenue forecast for the current quarter, offsetting better-than-expected fiscal second-quarter performance.
Revenue from handset chips, the company's core business, rose 12% year over year to $6.93 billion in the March quarter. While automotive and Internet of Things (IoT) units posted solid gains, investors appeared rattled by Qualcomm's guidance and potential share loss in upcoming Apple (NASDAQ:AAPL) iPhone models.
Morgan Stanley's Joseph Moore, who holds an Equal-Weight rating on the stock, said the pullback came as a surprise, pointing to strength in handsets and auto segments. However, Moore noted Qualcomm's share in Apple's next iPhone could slip to 70%, down from his earlier estimate of 78%.
Wells Fargo's Aaron Rakers maintained an Underweight stance, trimming his price target to $140 from $175. Heflagged concerns over the company's exposure to China, risks tied to losing Apple's modem business, and ongoing tariff uncertainty.
This article first appeared on GuruFocus.