(Bloomberg) — Qualcomm Inc. Chief Executive Officer Cristiano Amon said the company’s push into new markets is going as planned, even after its outlook for revenue growth fell flat with investors.
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“Our strategy is working,” he said Wednesday during a Bloomberg Television interview. “We’ve executed on what we said we were going to do.”
The remarks followed an investor presentation Tuesday where the chipmaker laid out growth targets for new product categories. Qualcomm, the world’s biggest seller of smartphone processors, has been pushing deeper into automotive parts and chips for connected devices. That’s included a bid to sell processors for personal computers — an area long dominated by Intel Corp.
Qualcomm is expecting these new areas to generate an additional $22 billion in annual revenue by fiscal 2029. But the presentation failed to impress investors, who sent the shares down as much as 6.5% to $154 on Wednesday. That was the biggest intraday drop in more than two months.
In the interview, Amon said that sales of Qualcomm’s PC chips are “exceeding expectations.” The CEO, who took the reins in 2021, is counting on that segment to generate $4 billion a year by 2029, a target he said is very achievable.
The broader Internet of Things category should provide $14 billion annually by that year, Qualcomm said. The market — a catch-all term for connected devices — includes PCs, industrial machinery, virtual reality gear and other equipment. Qualcomm’s expansion into automotive chips, meanwhile, is expected to generate $8 billion a year by that time.
The San Diego-based company is under added pressure to diversify because it’s set to lose one of its largest customers, Apple Inc. The iPhone maker is developing its own radio connectivity components, which will replace the products it buys from Qualcomm.
Apple’s attempts to supplant Qualcomm chips haven’t gone smoothly so far, and it has extended its supply agreement with the company twice in the past. But — with or without Apple — Amon said he’s confident that Qualcomm can reach its targets for the end of the decade. By that point, non-smartphone revenue should account for about half its sales.
Amon said that he’s not worried about his business in China, the biggest provider of revenue by region. He expects the capabilities of his chips to continue to attract Chinese customers. And because Qualcomm is an exporter of technology, he’s not concerned about trade tariffs proposed by incoming President Donald Trump.
