QUALCOMM Inc (NASDAQ:QCOM) shares surged in July leading up to the company's quarterly results. A strong earnings report from the chipmaker at the end of the month helped to reinforce the recent rally.
"We had record revenue both in IoT and automotive, and within handsets, we saw tremendous year-over-year growth in a market that's been relatively challenged because of the overall macroeconomic situation," Qualcomm CFO Akash Palkhiwala said Thursday on Benzinga's "Stock Market Movers."
Earnings Highlights: Qualcomm remains focused on diversifying its revenue streams. The chipmaker aims to transform itself from a "phone chip company" to a "connected processor company," Palkhiwala said.
Qualcomm reported 37% revenue growth year-over-year and more than 50% earnings growth in its latest report. The company also announced an extension of its agreement with Samsung for patent licensing.
"Samsung obviously is the largest handset company in the world. They are an incredibly important partner to us ... if not the most important," the Qualcomm CFO said.
Palkhiwala told Benzinga that the company agreed to extend its licensing agreement with Samsung through 2030.
"In addition to 3G, 4G, 5G technologies, this agreement also includes 6G," he emphasized.
As part of the agreement, Samsung will use Qualcomm's chips in its premium tier handsets. The two companies will also work together on additional products including tablets, personal computers and AR/VR devices.
"Very comprehensive agreement for the two companies," Palkhiwala said. "We are very aligned in our mission as we look forward and grow the company in a diversified way."
Expanding Qualcomm's Reach: All industries are going through a digital transformation and Qualcomm looks to bridge the gap.
"If you look at the overall trend in the industry, you're seeing everything connecting to the cloud," Palkhiwala said.
The Qualcomm CFO told Benzinga that the company is able to take its smartphone technology and apply it to other industries in need of cloud connectivity.
"We are naturally positioned to benefit from this change. That's what our IoT business is based on and we are, honestly, just at the beginning of the transformation of industries and so the opportunity in front of us is unlimited," Palkhiwala said before highlighting some examples.
Cisco Systems Inc (NASDAQ:CSCO) has a strong presence in enterprise access points for wifi, he said: "We supply the chip that connects the wifi routers in enterprises to the cloud."
Another great example can be seen in a device like IRobot Corporation's (NASDAQ:IRBT) Roomba, which Amazon.com, Inc. (NASDAQ:AMZN) plans to acquire.
"That is also a device that uses our chip and we connect it to the cloud," he said.
"Honestly it's limitless. There [are] a lot of other devices that I could go through, but hopefully that gives you a sense of the kind of opportunity in front of us."
As previously mentioned, Qualcomm showed significant growth in the automotive segment last quarter. The company's Automotive Investor Day is set to take place on Sept. 22.
"We are looking forward to having the opportunity to tell our story, to explain why we have an opportunity to win big in this area," Palkhiwala said.
Apple Inc (NASDAQ:AAPL) has also been rumored to have run into some problems in its iPhone chip development. Analysts have suggested that the tech giant will continue to use Qualcomm chips in its next-gen iPhones.
The Qualcomm CFO wasn't able to share any details on the current standing of its partnership with Apple, but he told Benzinga that the company remained confident that it will continue to make the best chips out there.
"We are very confident that as you look forward we will continue to deliver the best chips available and that's the basis for our partnership, not just with Apple, but with all customers," Palkhiwala said.
QCOM Price Action: Qualcomm has a 52-week high of $193.58 and a 52-week low of $118.23.
The stock was up 0.44% at $147.62 at press time Thursday, according to Benzinga Pro.
See below for the interview.