KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Qualcomm projected higher-than-expected fourth-quarter revenue, driven by strong demand for high-end Android devices and AI-enhanced smartphones. However, the chipmaker warned of a revenue hit due to the US revoking an export license for Huawei, impacting shares.
Key Points:
- Revenue Forecast: Qualcomm predicts fourth-quarter revenue with a midpoint of US$9.9 billion, surpassing Wall Street's estimate of US$9.71 billion.
- AI Enhancements: The integration of AI features in smartphones has boosted demand for Qualcomm's chips, aiding revenue recovery after a prolonged industry slump.
- Impact of Trade Curbs: The US revocation of an export license for Huawei will affect current quarter and first-quarter 2025 revenues. Qualcomm is negotiating with Huawei but does not expect chip revenue from the company beyond 2024.
- Stock Movement: Qualcomm shares initially rose over 5% in extended trading but later fell by more than 1% after the trade curbs warning. Arm Holdings also saw a 13% drop in extended trading due to a cautious revenue forecast.
- Segment Performance:
- Chip Sales: Forecast midpoint of US$8.4 billion for the fourth quarter, slightly above estimates of US$8.33 billion.
- Patent-Licensing Segment: Forecast midpoint of US$1.45 billion, above estimates of US$1.37 billion.
- Mobile Handsets: Third-quarter revenue grew 12% to US$5.9 billion.
- Automotive: Revenue surged 87% to US$811 million.
- Internet-of-Things: Revenue fell 8% to US$1.36 billion.
- Market Dynamics: Analysts, including Kinngai Chan from Summit Insights, noted that Qualcomm's market share in premium-tier smartphones is helping its outlook, with Apple's and ARM-based PCs contributing to growth.
- Diversification: Qualcomm's entry into the automotive market is an effort to reduce reliance on smartphones.
Analyst Insights:
- Kinngai Chan, Summit Insights: "We believe Apple and ARM-based PCs are driving Qualcomm's handset outlook. The premium tier smartphone market, which Qualcomm has more market share in, is faring better than the mainstream segment."
Future Prospects:
- Apple's Growth: Analysts expect Apple to report revenue growth for its fiscal third quarter, which could benefit Qualcomm.
- PC Market: Qualcomm's Arm-based processors in Microsoft's AI PCs could challenge Intel and AMD, potentially boosting Qualcomm's position in the personal computer market.
Qualcomm's optimistic forecast reflects strong demand for its AI-enhanced chips, but the ongoing trade tensions with China pose a significant challenge to its revenue growth.
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