Qualcomm Shares Rise Wednesday: What's Going On?

Qualcomm Incorporated (NASDAQ:QCOM) shares are trading higher Wednesday after Space Exploration Technologies Corp. (NASDAQ:SPCX) announced a multiyear deal with the chipmaker to provide network technology for its Starlink Mobile service in the U.S.

• Qualcomm stock is gaining positive traction. What’s driving QCOM shares up?

SpaceX Signs a Multiyear Deal with Qualcomm for Starlink Mobile Base Stations

According to CNBC, SpaceX struck a multiyear deal with Qualcomm to build out base stations for Starlink Mobile, its U.S. mobile service that is trying to take on Verizon Communications Inc. (NYSE:VZ), AT&T Inc. (NYSE:T) and T-Mobile US Inc. (NASDAQ:TMUS). Qualcomm said the terrestrial network it will help SpaceX build will complement Starlink’s satellite capabilities, with a planned rollout beginning next year. Financial terms weren’t disclosed. SpaceX will use Qualcomm’s Dragonwing cellular infrastructure hardware and software in base stations to enable high-capacity coverage. Qualcomm said the deal is its largest 5G initiative to date.

"Together with SpaceX, we are building world-leading cellular infrastructure in the United States, advancing 5G today, with an opportunity to lay the foundation for AI-native 6G in the years ahead," said Durga Malladi, an executive vice president at Qualcomm.

Why the SpaceX Agreement Matters for Qualcomm

CNBC reported that Starlink accounted for 36% of SpaceX’s third-quarter revenue and 85% of its operating profit, but the consumer business has been limited in mobile direct-to-device service because its satellite network can’t provide all the voice, video and data coverage that competitors offer on smartphones. SpaceX has been buying spectrum and forming partnerships to take on the major carriers. In October, it announced an agreement to purchase a nationwide spectrum portfolio in the 800 MHz band, and the Washington Post reported this week that it is in talks to acquire EchoStar’s Boost Mobile.

SpaceX plans to use Qualcomm’s technology to establish tens of thousands of new cell sites, though it hasn’t announced partners among cell tower companies or said how many new towers may be required. Qualcomm is best known for modems and radios that go inside devices, not base stations, but has pushed into 5G infrastructure since 2020. CNBC said SpaceX is one of its highest-profile infrastructure partners, following earlier deals with Verizon, Dish and Vodafone.

Qualcomm to Report Fiscal Fourth-Quarter Results Today

Qualcomm is scheduled to report fiscal fourth-quarter earnings today, Nov. 4, after the market closes. Analysts estimate earnings per share of $2.16 along with revenue of $10.11 billion. For the prior quarter, Qualcomm reported adjusted earnings per share of $2.21, missing the consensus estimate of $2.23. The company also posted revenue of $9.95 billion, beating the consensus estimate of $9.67 billion. For the fourth quarter, Qualcomm guided to revenue of $9.7 billion to $10.5 billion and adjusted earnings per share of $2.05 to $2.25.

Qualcomm Shares Rise

QCOM Price Action: At the time of publication, Qualcomm shares are trading 2.74% higher at $168.93, according to data from Benzinga Pro.

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