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Qualcomm Shares Fall on Downbeat Forecast for Licensing Business

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Qualcomm’s (QCOM.O) shares dropped by around 5% in early trading on Thursday following a disappointing forecast for its patent licensing business, despite strong expectations for quarterly sales and profits. The chipmaker revealed that its licensing business, which contributed 14.8% to its total revenue in the reported quarter, would experience no sales growth this year due to the expiration of its agreement with Huawei Technologies (HWT.UL).

TD Cowen analysts had initially expected the removal of Huawei’s royalty payments to have a mild impact, but they noted that the development adds to the “wall of worry” surrounding Qualcomm’s stock. However, analysts pointed out that Qualcomm has secured licensing agreements with two other Chinese smartphone manufacturers, which may help mitigate some of the losses.

The company’s first-quarter performance exceeded expectations, driven by strong demand for AI features in mobile devices, and is often seen as a barometer for broader smartphone industry trends. Qualcomm’s second-quarter sales forecast of $10.75 billion, with adjusted profits of $2.80 per share, surpassed analysts’ estimates of $10.34 billion and $2.69 per share, respectively, as reported by LSEG data.

While Qualcomm credited growth in its smartphone division to strong sales from China, powered by government subsidies and flagship smartphone launches, it also highlighted positive performance across other business segments, including handsets, autos, and IoT.

Despite gains in 2024, Qualcomm’s stock has underperformed AI chip leader Nvidia (NVDA.O), whose shares surged by 171%. Qualcomm’s stock has increased by 6% this year, far surpassing the losses seen by competitors like Intel (INTC.O), which saw a 60% decline, and Advanced Micro Devices (AMD.O), which dropped by 18%.

As a result of the company’s outlook, Qualcomm’s median price target decreased slightly to $192, down from $199 prior to the report, according to LSEG data. The company’s forward price-to-earnings ratio stands at 15.02, significantly lower than Nvidia’s 27.64 and Intel’s 32.21.

 

Siemens Healthineers Shares Rise on Q1 Revenue Beat Despite China Order Delays

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Siemens Healthineers (SHLG.DE) reported stronger-than-expected first-quarter revenue on Thursday, with a 5.9% year-on-year increase, despite challenges posed by delayed customer orders in China. The company’s Q1 group revenue reached 5.48 billion euros ($5.69 billion), slightly surpassing the 5.37 billion euros forecast by analysts.

The revenue boost was driven by a 16% surge in U.S. revenues, counteracting a 6% decline in sales from China, which the company attributed to “continued delays in customer orders.” Like many of its peers in the healthcare technology sector, Siemens Healthineers has been impacted by China’s ongoing anti-corruption campaign, leading to reduced hospital equipment orders in the region.

Siemens Healthineers’ Chief Financial Officer, Jochen Schmitz, stated that the company expects continued challenges in China, forecasting a decline in sales in the “medium to high percentage range” during the first half of the year. He also noted a “flat trend” in China’s performance over the following quarters.

Despite the challenges, Siemens Healthineers remains cautiously optimistic, with CEO Bernd Montag emphasizing that while global trade disruptions, such as U.S. tariffs on imports from Mexico and Canada, are a concern, the risk to the healthcare and medical technology sectors remains relatively low. He added that U.S. tariffs on Chinese imports would have a “minor” impact on the company’s business.

The company also expects a stronger U.S. dollar to play a role in its financial outlook. Siemens Healthineers confirmed its full-year guidance, with revenue growth anticipated to fall within the lower end of the projected range of 5% to 6% for the second quarter.

 

TikTok’s Chinese Owner Appears to Delay Sale Negotiations, Awaiting Chinese Government Approval

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TikTok’s parent company, ByteDance, seems to be delaying the sale of the popular short video app as it awaits approval from the Chinese government, according to a report by the Washington Post. Despite efforts by President Donald Trump’s allies to broker a deal to sell TikTok to an American buyer, ByteDance appears to be stalling negotiations.

The Chinese government is expected to take a hard-line stance, possibly allowing TikTok’s U.S. operations to shut down rather than approving a sale. China reportedly hopes to leverage the situation into a broader deal with the Trump administration that includes significant concessions on trade and technology policy.

This development comes amid escalating tensions between the U.S. and China, as the trade war intensifies. In retaliation to U.S. tariffs on Chinese imports, China imposed its own tariffs on U.S. goods. Meanwhile, TikTok, which has 170 million American users, was temporarily removed from app stores in the U.S. just before a law that would have mandated its sale took effect on January 19.

Trump signed an executive order the day after taking office, delaying enforcement of the law for 75 days. The legislation was introduced on national security concerns over the potential misuse of American user data by ByteDance.