The market rewards those technology companies that never stand still. A compelling case in point is Qualcomm (QCOM) , the giant semiconductor company that manufactures chips for smartphones and other devices. Qualcomm is making a big bet on the Internet of Things (IoT), a strategic pivot that’s already showing up on the bottom line.
You should get aboard QCOM now, while Wall Street underestimates the company’s reinvention and the stock remains cheap. Shares fell slightly in Wednesday trading.
This mature tech company has encountered headwinds in smartphone demand, but that hasn’t stopped the behemoth from executing some nifty broken-field running. We explain why Qualcomm is a smart growth-and-income play in a turbulent market.
Last month, San Diego-based Qualcomm released fiscal third-quarter earnings that beat expectations as well as management guidance, largely driven by new forays into IoT, one of the hottest sources of tech innovation today.
The company said it earned $1.4 billion, up 22% from $1.2 billion in the same quarter a year earlier. Earnings per share surged 33% year over year to 97 cents from 73 cents. EPS adjusted for one-time events was $1.16, up 17% from 99 cents a year earlier. On average, analysts had been expecting Qualcomm to report adjusted EPS of 97 cents. Revenue grew 4% year over year to $6.0 billion from $5.8 billion.
Analysts estimate that mobile-related server, automotive and IoT markets could reach a global value of $29 billion by 2020, according to Market Realist. That would make IoT an unstoppable trend that will richly reward the companies that tap into it now.
