Qualcomm Layoffs Continue As Company Re-Focuses On Promising Automotive Sector
Key takeaways
- Qualcomm has announced new partnerships with AWS, BMW and Mercedes
- The news comes as the chip maker confirmed it would make more layoffs this quarter after poor financial results
- Qualcomm’s share price rose 1.2% on Tuesday
Qualcomm is diving headfirst into the automotive business, with a slew of announcements this week confirming the chip maker’s concerted efforts to break further into the sector. The move comes as the company continues its layoffs, as confirmed in its latest securities filing. Let’s get into it.
What’s happening with Qualcomm?
Qualcomm is an OG in the tech industry, but it’s looking to show it can still get down with the kids. The chip company unveiled two new announcements this week, the first being that it will soon supply chips to power in-car entertainment systems for Mercedes and BMW.
The second is that Qualcomm is joining forces with Amazon Web Services to help bring new software and functionality to automakers for self-driving and autonomous vehicles. With Qualcomm’s software stack and AWS’ cloud services, it’s a promising match-up for the two companies.
The legacy chip maker recently lost the title of the world’s biggest fabless chip company, with Nvidia snatching the crown by reporting doubled revenue in its latest quarterly earnings report.
The pivot towards the automotive industry comes as Qualcomm confirmed it would make more layoffs in its latest securities filing. The company already slashed 415 positions at its San Diego office earlier this year.
How has Qualcomm stock performed this year?
Qualcomm stock rose 1.2% at the news on Tuesday. The stock has risen 8.72% since the start of the year, compared to the Nasdaq’s 35% gain so far in 2023.
The company has previously commented that its pipeline for the automotive business was $30 billion thanks to its Snapdragon Digital Chassis product. The chip maker anticipates an extra $4 billion in revenue from the sector by 2026 and $9 billion by 2030.
Qualcomm is also making moves in the AI sector. In May, Microsoft announced Qualcomm Snapdragon processors would power its offline AI models, while Meta has confirmed its ChatGPT rival, Llama 2, will run on Qualcomm chips from 2024.
The bottom line
Qualcomm doesn’t get as much attention as Nvidia, but it’s a potential sleeper stock for investors to keep track of. Qualcomm’s chips might be down on the finances side of things, but the automotive industry growth is promising — and Qualcomm isn’t resting on its laurels here.
