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- Tech Giants Are Still Sustainable: Qualcomm
Tech Giants Are Still Sustainable: Qualcomm
Qualcomm is a leading company in wireless technology that creates semiconductors, software and services related to it. The company has delivered mixed Q2 FY 2023 financial results with regards to the slow recovery of the economy in China and the somewhat disappointing situation linked to Apple, which is a major client for QCOM. The prospects of the company are seen to be promising as wireless technologies are expanding into everyday life. However, this technology is mostly bound to mobile phone sales now with all of its issues hugely affecting QCOM business. Revenues from smartphone related sales were down by 17% year-on-year to $6.105 billion, while vehicles related sales were up by 24% y-o-y to $1.390 billion.
Nonetheless, smartphone sales are not as affected and they may seem at first glance. There is no bubble in this segment as sales are not deteriorating that much compared to notebooks or tablets that were booming during the pandemic. The move towards 5G devices and regular introduction of new, more complicated and expensive smartphones, will generate more revenues for Qualcomm even if sales of smartphones remain at the present level.
QCOM stocks are trading 45% off their peak prices with dividend yield at 3%. In other words, investors now have an opportunity to buy perspective stocks at a significant discount. Qualcomm is conducting a buyback of its stocks with $903 million spent on this in the Q1 2023.
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