Qualcomm (QCOM) extended its premarket gains after beating fourth-quarter expectations and issuing a positive outlook for the current quarter. The chipmaker also approved a $15 billion stock buyback.

Moor Insights & Strategy Founder, CEO, and Chief Analyst Patrick Moorhead, breaks down what the Qualcomm rally means for investors with Brad Smith and Seana Smith.

Moorhead shares that investors should focus on Qualcomm’s diversification strategy. “Five years ago, Qualcomm only stood for smartphones,” Moorhead said. “While smartphones are a very large percentage of their revenues, they've diversified into a gigantic automotive business with a $45 billion backlog.”

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This post was written by Cindy Mizaku.