Palantir shares slip by 7% despite posting record revenue in third quarter
Introduction & Market Context
Qualcomm Incorporated (NASDAQ:QCOM) presented its third quarter fiscal 2025 earnings results on July 30, 2025, showcasing solid financial performance across its business segments. The chipmaker’s stock responded positively, rising 2.05% to $178.69 in aftermarket trading following the announcement, reflecting investor confidence in the company’s growth trajectory and strategic initiatives.
The presentation revealed Qualcomm’s continued success in diversifying beyond its traditional smartphone chip business, with particularly strong growth in automotive and Internet of Things (IoT) segments. These results come amid an industry-wide push toward artificial intelligence integration and edge computing capabilities.
Quarterly Performance Highlights
Qualcomm reported Q3 FY25 revenues of $10.4 billion, representing a 10% year-over-year increase, while Non-GAAP earnings per share (EPS) grew 19% to $2.77. The company’s chipset business, QCT, delivered revenues of $9.0 billion, up 11% year-over-year, with particularly strong performance in its diversification segments.
The company’s QTL licensing business generated $1.3 billion in revenue, a 4% increase compared to the same quarter last year. QTL maintained robust profitability with an EBT margin of 71%, at the high end of guidance. Qualcomm returned $3.8 billion to stockholders during the quarter, including $2.8 billion in share repurchases and $1.0 billion in dividends.
A detailed breakdown of the financial results shows impressive growth across all QCT segments, with handsets up 7% to $6.3 billion, automotive up 21% to $984 million, and IoT up 24% to $1.7 billion. The combined automotive and IoT revenues reached $2.7 billion, representing 23% year-over-year growth.
Strategic Initiatives and Partnerships
Qualcomm highlighted several strategic partnerships that strengthen its market position. The company extended its collaboration with Xiaomi through a multi-year agreement focused on premium smartphones. Under this agreement, Xiaomi’s premium smartphones will continue to be powered by Snapdragon 8-series platforms, with volumes increasing each year.
In the automotive sector, Qualcomm announced that BMW’s upcoming Neue Klasse vehicles will include Snapdragon Ride platforms. The company’s Snapdragon Ride ADAS/AD Platform is now being used in more than 20 global OEM programs with launches expected in the next 18 months. The platform supports a new ISO safety-certified ADAS stack developed with BMW and offers various highway and urban navigation functions.
The company also revealed that Samsung’s Galaxy Z Fold7 will be powered by the Snapdragon 8 Elite for Galaxy globally. According to Qualcomm, the Snapdragon 8 Elite for Galaxy delivers 38% better CPU performance, 26% better GPU performance, and 41% better NPU performance compared to the Snapdragon 8 Gen 3 used in the Galaxy Z Fold6.
AI and Edge Computing Advancements
Qualcomm is making significant strides in AI capabilities, demonstrating a 1 billion parameter model running locally on smart glasses. The company unveiled the Snapdragon AR1+ Gen 1, a compact and power-efficient chipset designed for smart glasses with on-device AI processing. This innovation represents a significant step forward in wearable AI technology, offering up to 20% reduction in temple height and 7% power reduction for key use cases.
At COMPUTEX 2025, Qualcomm announced a collaboration with Advantech to advance AI-driven IoT applications. This partnership aims to enable deeper integration of Qualcomm’s technologies into Advantech’s edge computing and edge AI platforms, accelerating the deployment of intelligent solutions across industries.
Acquisition Strategy
Qualcomm’s presentation highlighted its strategic acquisition activities aimed at strengthening its technology portfolio. The company announced an agreement to acquire Alphawave Semi at an implied enterprise value of approximately $2.4 billion. Alphawave’s high-speed wired connectivity and compute technologies will complement Qualcomm’s next-generation custom Qualcomm Oryon CPU and Qualcomm Hexagon NPU processors.
The company also mentioned strategic acquisitions of Edge Impulse and FocusAI, further enhancing its AI capabilities. These acquisitions, along with the Alphawave deal, demonstrate Qualcomm’s commitment to expanding its technology stack and addressing growing demand for AI inferencing and high-performance, energy-efficient compute solutions.
Forward-Looking Statements
Looking ahead, Qualcomm provided guidance for the fourth quarter of fiscal 2025, projecting revenues between $10.3 billion and $11.1 billion and Non-GAAP EPS between $2.75 and $2.95. The company maintained its full-year Non-GAAP effective tax rate guidance at approximately 14%.
Qualcomm expects continued strength in its QCT segment, with Q4 FY25 revenue guidance of $9.0 billion to $9.6 billion and QCT EBT margin of 27% to 29%. For QTL, the company projects Q4 revenues of $1.25 billion to $1.45 billion with an EBT margin of 69% to 73%.
The company remains focused on its diversification strategy, with combined automotive and IoT segments showing robust growth. Qualcomm’s investments in AI capabilities, edge computing, and strategic acquisitions position it well for future growth in these expanding markets, as the demand for AI-driven solutions and automotive technologies continues to increase.
Full presentation:
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