Qualcomm announced it will almost double its non-handset revenue by 2029. The stock jumped 15 percent. Investors bought shares based on a projection about money the company might make three years from now in business lines that currently don't matter.
Smartphones are two-thirds of Qualcomm's product revenue right now. The company just told everyone to get excited about the other third. Which will become bigger. Later. Maybe. The chart goes up and to the right in the PowerPoint so it must be real.
Three years is 156 weeks. A thousand things will happen between now and then. The CEO will change. The product mix will shift. Entire markets will appear and vanish. But some guy in a Robinhood account saw the headline and clicked buy because the number got bigger.
Qualcomm did not announce a new chip. They did not beat earnings. They did not unveil a product. They just said a number out loud about 2029 and fifteen percent of the company's value materialized out of thin air.
The non-handset revenue includes automotive chips and IoT and other things that sound important in a press release. None of it changes what happens tomorrow. Or next week. Or next quarter. But the stock moved today because someone updated a forecast in a spreadsheet.
Retail traders are now long Qualcomm based on management guidance about revenue streams that won't hit their stride until the next presidential election. They will check the stock price forty times before the projection even starts to matter. They will panic sell twice. They will buy back in at a higher price. And in 2029 when the revenue actually shows up or doesn't, they will have forgotten why they ever owned it in the first place.
Photo by on Unsplash
Leave a Comment