.Friday, July 18, 2024 08:05 AM

Qualcomm (NASDAQ:QCOM) shares fell over 8% after HSBC downgraded the company to Hold, citing a lack of catalysts and a less optimistic view on the AI PC market. The target price was raised to $200 from $190, but analysts are cautious about the stock’s near-term prospects.

HSBC predicts Qualcomm’s Q3/24 revenue to be $9.3 billion, slightly above the consensus of $9.2 billion, with a gross margin of 55.9%, just below the Street estimate of 56.1%.

For Q4/24, HSBC expects revenue to stay flat at $9.3 billion, missing the consensus of $9.8 billion due to lower handset revenue. The gross margin is projected to drop to 55.6% from the consensus of 55.9%.

HSBC highlights uncertainties in the smartphone market, especially with a projected 15% quarter-over-quarter decline in China’s Android handset market. The rollout of the 3nm-based Snapdragon Gen 4 is also expected to impact gross margins.

Potential unit shipment losses from 4G SoCs at Huawei are contributing to the cautious outlook on Qualcomm’s future performance.