Qualcomm stock surges as Samsung partners for Galaxy S25

Qualcomm Inc (NASDAQ: QCOM) is gaining in premarket on Tuesday following a report that Samsung Electronics Co Ltd (KRX: 005930) plans on switching entirely to chips made by the California based company. 

Samsung Galaxy S25 to use QCOM chips

Samsung will exclusively use QCOM’s next-gen chipset in its upcoming Galaxy S25, says Ming-Chi Kuo – a renowned tech analyst of TF Securities. 

Kuo made the revelation first this morning on X.com. 

Qualcomm will likely be the sole SoC supplier for the Samsung Galaxy S25 (vs 40% for the S24), as the Exynos 2500 may not ship due to Samsung’s lower-than-expected 3nm yield.

His report arrives more than a month after QCOM reported its financial results for the second quarter that handily topped Street estimates. Qualcomm stock is currently up more than 60% for the year. 

Why is Samsung news significant for Qualcomm

Qualcomm Inc will also increase the price of its Snapdragon 8 Gen 4 by 25% to 30%, as per Ming-Chi Kuo. 

Plus, Samsung became the top player in the global smartphone market again in the first quarter of 2024. That’s what makes the aforementioned news all the more significant for QCOM. 

Note that Samsung is developing an XR (extended reality) headset to take on the Apple Vision Pro. It is broadly expected to be powered by the Exynos 2200 chipset. 

But Exynos 2200 is not power friendly and tends to overheat as well which may eventually make Samsung opt for Qualcomm chips for its XR headset as well. 

Could Qualcomm stock rally any further?

In May, Qualcomm issued upbeat guidance for its third financial quarter. It now forecasts revenue to fall between $8.8 billion and $9.6 billion on up to $2.45 a share of adjusted earnings. 

QCOM shares have gained more than 60% since the start of this year but analysts at TD Cowen are convinced they have more room to the upside still on continued AI advancements and solid momentum in the automotive sector. 

Note that Microsoft recently announced a Surface Pro tablet and Surface Laptop powered by advanced Qualcomm chips to handle AI features on Windows without being super heavy on the battery. 

Qualcomm stock currently pays a dividend yield of 1.53% as well which makes up for another good reason to have it in your investment portfolio. 

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