Qualcomm (QCOM) & Arm (ARM) Earnings Preview: What Investors Need to Know Amid AI Disruptions

The semiconductor sector is bracing for a pivotal moment as Qualcomm (NASDAQ: QCOM) and Arm Holdings (NASDAQ: ARM) prepare to report their quarterly earnings on Wednesday, Feb. 5, after market close. With a combined market capitalization of $360 billion, their financial results could significantly impact chip-heavy ETFs like SMH (VanEck Semiconductor ETF) and broader tech market sentiment.

AI Disruptions and Market Expectations

These earnings arrive on the heels of a major AI development—DeepSeek-R1, an open-source artificial intelligence model from China. This breakthrough operates efficiently on reduced hardware, leading to a potential shift in AI-related semiconductor demand. Investors will closely watch Qualcomm and Arm’s guidance on how AI adoption is shaping their revenue streams.

Qualcomm (QCOM) Earnings Preview

• Expected EPS: $2.96 (vs. $2.75 last year)
• Expected Revenue: $10.9 billion (vs. $9.92 billion last year)
• Stock Implied Move: ± 11 points (~6.4%)
• January Stock Performance: +12.57% (best month since May 2024)

As a top fabless semiconductor company, Qualcomm’s earnings will be driven by AI, mobile, and automotive chip sales. Analysts remain bullish, with 22 buy ratings, 18 holds, and just one sell rating. The average one-year price target is $199.72, reflecting 15% upside potential.

Arm Holdings (ARM) Earnings Preview

• Expected EPS: $0.34 (vs. $0.29 last year)
• Expected Revenue: $949.3 million (vs. $824 million last year)
• Stock Implied Move: ± 15.87 points (~9.7%)
• January Stock Performance: +29.3% (best month since June 2024)

Arm’s revenue model heavily relies on royalties from chip architecture designs, making AI chip adoption a crucial factor in its earnings growth. Analyst sentiment remains bullish, with 25 buy ratings, 13 holds, and 4 sell ratings. However, the one-year price target of $151.75 suggests a potential 7% downside from Tuesday’s levels.

Key Trading Levels to Watch

• For QCOM: A strong report could push shares toward $182.10, a key resistance level. A miss might send prices back to December lows.
• For ARM: An earnings beat could extend January’s rally, testing previous highs.

With AI-driven demand, market volatility, and recent semiconductor disruptions, Qualcomm and Arm’s earnings could be a major catalyst for tech investors in the coming weeks.