JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
Qualcomm Incorporated (NASDAQ:QCOM) reported strong second-quarter fiscal 2025 results on April 30, with double-digit growth across key segments, particularly in its automotive and IoT businesses. Despite the positive performance, the stock experienced a 5.6% decline in after-hours trading following the announcement.
Quarterly Performance Highlights
Qualcomm delivered robust financial results for Q2 FY25, with Non-GAAP revenues reaching $10.8 billion, up 15% year-over-year. Non-GAAP earnings per share (EPS) increased by 17% to $2.85, exceeding analyst expectations of $2.80. The company’s QCT segment, which includes chipset sales, saw revenues rise 18% to $9.5 billion, driven by strength across all business lines.
As shown in the following detailed breakdown of Qualcomm’s second quarter fiscal 2025 results:
The company’s diversification strategy continues to bear fruit, with particularly strong performance in its automotive and IoT segments. Automotive revenues surged 59% year-over-year to $959 million, while IoT revenues grew 27% to $1.58 billion. The core handsets business also showed healthy growth of 12%, reaching $6.93 billion.
The following year-over-year comparison highlights the strong growth across Qualcomm’s business segments:
"We are playing in a market that is being transformed," noted Qualcomm CFO Akash Palakkawala during the earnings call, highlighting the company’s strategic positioning across multiple growth sectors.
Strategic Initiatives
Qualcomm announced several strategic initiatives during the quarter, reinforcing its commitment to innovation and expansion beyond its traditional mobile business. The company unveiled the Qualcomm X85 5G Modem-RF platform, positioned as the world’s most advanced modem-to-antenna system, designed to deliver high-performance 5G connectivity for AI experiences.
As illustrated in this product announcement slide:
The company is making significant inroads in the PC market, with more than 85 Snapdragon X-powered PC designs currently in production or development. Qualcomm is targeting more than 100 designs to be commercialized through 2026, demonstrating strong momentum in this relatively new market segment for the company.
In the automotive sector, Qualcomm secured 30 new designs and saw 14 commercial vehicle launches from global automakers utilizing its Snapdragon Digital Chassis solutions, bringing the total to 29 launches since the start of the fiscal year.
Qualcomm also completed two strategic acquisitions during the quarter – Edge Impulse and FocusAI – to bolster its AI and IoT capabilities. The Edge Impulse acquisition enables more than 170,000 developers to create, deploy, and monitor AI models for edge applications.
The following slide details the Edge Impulse acquisition:
The company also announced expanded collaborations with IBM (NYSE:IBM) and Palantir (NASDAQ:PLTR) to drive enterprise-ready generative AI solutions. The partnership with IBM aims to scale enterprise-grade generative AI from edge to cloud, with Qualcomm planning to integrate IBM watsonx.governance into the Qualcomm AI Inference Suite.
As shown in this partnership announcement:
Financial Analysis and Capital Return
Qualcomm continues to demonstrate strong financial discipline while returning significant capital to shareholders. The company returned $2.7 billion to stockholders during the quarter, including $1.7 billion in share repurchases and $0.9 billion in dividends. Additionally, Qualcomm increased its quarterly cash dividend, bringing the annualized payout to $3.56 per share.
The company also announced an increase in its target for total return of capital to stockholders to 100% of free cash flow in fiscal 2025, up from previous guidance.
The following reconciliation provides a clear view of Qualcomm’s GAAP to Non-GAAP financial measures:
Forward-Looking Statements
Looking ahead, Qualcomm provided guidance for the third quarter of fiscal 2025, projecting revenues between $9.9 billion and $10.7 billion and Non-GAAP EPS between $2.60 and $2.80. This represents a slight sequential decrease from Q2 results, which may partially explain the negative market reaction despite the strong quarterly performance.
As detailed in the company’s business outlook:
The guidance suggests Qualcomm expects some moderation in growth for the coming quarter, though the company remains optimistic about its long-term prospects, particularly in automotive, IoT, and AI-enabled devices.
Market Context
Despite Qualcomm’s strong quarterly results, the stock declined 5.6% in after-hours trading following the announcement, closing at $140.15. This reaction contrasts with the company’s solid financial performance and may reflect broader market concerns or investor expectations for even stronger guidance.
According to the latest data, Qualcomm’s stock has been trading well below its 52-week high of $230.63, though recent premarket activity shows a 1.21% increase to $149.39 as of May 29, 2025, suggesting some recovery from the post-earnings dip.
The company’s forward-looking statements and strategic initiatives indicate a continued focus on diversification beyond its traditional mobile business, with significant investments in automotive, IoT, and AI capabilities. These efforts position Qualcomm to capitalize on emerging technology trends while maintaining its leadership in mobile connectivity solutions.
Full presentation:
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