Is it worth buying Qualcomm stock after its Q3 results?

Investors should move to the sidelines in Qualcomm Inc (NASDAQ: QCOM) after the chipmaker reported disappointing revenue for its fiscal Q3, says a Deutsche Bank analyst.

Qualcomm stock lacks a meaningful upside

Qualcomm noted continued weakness in smartphone chips in its recently concluded quarter that pushed revenue down to $8.44 billion versus $8.50 billion expected.  

Its guidance for the current quarter also came in shy of Street estimates – reacting to which, Deutsche Bank analyst Ross Seymore told clients in a research note on Thursday:

He downgraded Qualcomm stock today to “hold” and trimmed his price objective to $120 that does not suggest a meaningful upside from here.

Qualcomm’s guidance for the fourth quarter

Qualcomm now forecasts its revenue to fall between $8.1 billion and $8.9 billion in the fourth quarter on $1.80 to $2.0 of per-share earnings, as per the press release.

In comparison, analysts were at $1.91 per share and $8.7 billion, respectively. According to Ross Seymore:

Note that the Nasdaq-listed firm relies heavily on android phone sales. In the third quarter, its handset chip sales went down 25% on a year-over-year basis to $5.26 billion. Qualcomm stock is still up 10% versus the start of 2023.