Qualcomm’s shares rose more than 8.8% Thursday in premarket trade after reporting Q2 2022 revenue and earnings that were above analyst forecasts.

QCOM adjusted earnings per share of $3.21 were 69% higher YoY than the consensus estimate of $2.91. Revenue was $11.16 million, an increase of 41% YoY over the $10.60 billion expected.

QCT reported sales of $9.55 Billion, surpassing consensus estimates of $8.86 Billion and increasing 52% YoY. QTL Unit generated $1.58 Billion, down 2 percent YoY but slightly higher than the consensus estimate of $1.55 Billion.

All of Qualcomm’s primary chip markets grew in the period. While the handset market increased 56% to $6.33 Billion YoY, RF front-end experienced a 28% increase to $1.16 Billion. In automotive sales, the chipmaker made $339m. This is an increase of 41% YoY. Sixty-one percent YoY growth was seen in the IoT industry, which reached $1.72 trillion.

QCOM posted $764 Million in cash dividends in its first quarter and also bought back $951,000,000 worth of shares.

The chipmaker anticipates EPS of between $2.75 and $2.95 for Q3 on approximately $10.9 billion of sales. This compares to analysts’ estimates of a $9.98 million sales forecast.

Raymond James analyst Chris Caso reiterated a Strong Buy rating after Q1 results showed there were “no problems here.”

“Qualcomm silenced the critics with a strong report and guidance despite chatter regarding China handset weakness during the quarter. The main source of upside vs. expectations was share gains on Samsung’s flagship platform, which carries high Qualcomm content… The stock has derated on higher numbers, having achieved the bull case expectation of $12+ in implied earnings power laid out at the analyst day, resulting in the stock now trading under 11x our revised FY23 EPS, providing what we consider to be a very attractive valuation,” Caso said in a client note.

Morgan Stanley analyst Joseph Moore said QCOM “shrugged off concerns around China smartphones.” The analyst raised the price target to $170.00 per share from $167.00.

“We expected to see the solid demand environment for QCT products (SoC, auto, IoT) persist through the March quarter, as previewed, with some weakness around royalties and RF adding potential risk to upside in the quarter and guidance, but strong ASP growth and a favorable demand environment in high-end and premium tier continues to take overall numbers higher… Looking ahead to the June and September quarters, we prefer to take a more cautious view,” Moore wrote in a memo.

By Senad Karaahmetovic