Qualcomm (QCOM) shares rose 0.9% to $138.64 during Monday's trading session, marking a partial rebound following recent declines. The uptick coincided with the company's announcement of a significant 2-nanometer chip design milestone achieved through its engineering teams in India.
Engineering Achievement and Market Context
The chipmaker highlighted that its research and development centers in Bengaluru, Chennai, and Hyderabad completed the "tape-out" phase for a 2nm design, representing the finalization of engineering specifications before manufacturing begins at external foundries. Senior executives emphasized India's growing role in Qualcomm's global engineering strategy, particularly in developing advanced computing and artificial intelligence capabilities for devices.
This technical progress arrives amid broader challenges for the semiconductor firm. Qualcomm recently warned that March-quarter results would fall below expectations, projecting revenue between $10.2 billion and $11 billion with adjusted earnings per share of $2.45 to $2.65. CEO Cristiano Amon cited constrained memory chip supplies as the primary issue, specifically affecting smartphone manufacturing in China.
Sector Performance and Analyst Outlook
Chip stocks generally showed strength, with the Philadelphia Semiconductor Index climbing approximately 1.7%. Analysts note that Qualcomm's stock often serves as a barometer for smartphone production sentiment, making it sensitive to broader semiconductor sector movements.
Bernstein analyst Stacy Rasgon maintained an Outperform rating with a $200 price target but acknowledged near-term pressure from memory inventory issues. The fundamental concern remains whether memory supply constraints could persist through 2027, potentially limiting smartphone output and pressuring mobile chip suppliers.
Investors are now looking ahead to Mobile World Congress in early March for indications of memory price stabilization and Chinese smartphone demand trends. Meanwhile, Qualcomm may increasingly rely on its automotive and other non-smartphone segments to offset weakness in handset sales if component shortages continue.
