Semiconductor Giants Brace for Earnings: Qualcomm and Arm Face Diverging Paths

Qualcomm: Facing Challenges with Technical Bearish Signals

As a key player in mobile chipsets, Qualcomm is encountering significant bearish indicators.

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Currently, QCOM stock is trading at $165.87, which falls well below its eight, 20, and 50-day simple moving averages. Analysts predict the fourth quarter earnings per share (EPS) will be $2.56, with revenue estimated at $9.91 billion. Despite these projections, recent technical indicators suggest investors proceed with caution.

The MACD (Moving Average Convergence/Divergence) for QCOM stands at -0.94, while the RSI (Relative Strength Index) is 45.95, signifying a neutral condition with limited potential for immediate gains amid prevailing bearish momentum.

Qualcomm’s strategic push into automotive and Internet of Things (IoT) markets signals a shift in focus. However, regulatory hurdles and competition—especially from Apple Inc‘s AAPL modem efforts—cast a shadow over the outlook, affecting investor sentiment.

Read Also: AMD’s AI Data Center Business Booms: CEO Says It’s ‘Closed A Good Part Of That Gap’ With Nvidia

Arm Holdings: Signs of Positivity Amid Challenges

Arm stands out with its IP-licensing strategy, demonstrating resilience despite facing bearish trends.

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Currently, ARM stock is trading at $139.89. This price is below its short-to-medium term simple moving averages (eight-day at $145.69, 20-day at $148.79, and 50-day at $141.22), indicating a bearish trend. Its MACD reading of -0.23 further confirms the negative motion.

On a positive note, the 200-day SMA offers support at $131.04, suggesting potential long-term strength.

Analysts expect the second quarter EPS to be 26 cents, with revenue predicted at $808.37 million.

Unlike Qualcomm, Arm’s royalty-based business model provides a shield against manufacturing issues, positioning the company for growth in high-demand sectors such as AI, data centers, and IoT.

Contrasting Risks and Opportunities

Both companies display bearish signals, yet they diverge in their strategies. Qualcomm’s cyclicality contrasts with Arm’s steadier IP-driven model. Investors focused on Qualcomm might anticipate growth in 5G and automotive markets. Meanwhile, Arm’s strength lies in its potential as a diverse IP powerhouse.

This earnings season is crucial for both companies, yet technical charts indicate a cautious approach is warranted.

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