Things Have to Change at Qualcomm, Goldberg Says

Summary

Jay Goldberg of Seaport Research Partners discusses Qualcomm's outlook, arguing it faces near-term margin pressure from expensive memory and longer-term structural threats as major handset customers design their own applications processors and modems. He says Qualcomm's diversification efforts have not delivered and management appears complacent, calling for a sense of urgency. He doubts the upcoming earnings call will show the needed change.

• Qualcomm's light forecast is framed around handset business weakness.
• Memory prices are described as a near-term headwind for margins and handset demand.
• Major handset vendors are in-sourcing applications processors and modems, threatening Qualcomm's core cellular business.
• Qualcomm's diversification into automotive, IoT, PCs, and data center has not produced meaningful results.
• Goldberg sees Qualcomm management as complacent and wants a more urgent response.
• He does not expect the upcoming earnings call to deliver the urgency or humility he wants to hear.