Qualcomm (QCOM) is scheduled to report results of its fiscal second quarter after the market closes on May 3 with a conference call scheduled for 4:45 pm ET. What to watch for:

LAST QUARTER/GUIDANCE: Last quarter, Qualcomm reported Q1 adjusted earnings per share of $2.37 on revenue of $9.46B, compared to analysts' estimates for $2.34 and $9.6B, respectively. Along with the report, the company guided for Q2 adjusted EPS of $2.05-$2.25 on revenue of $8.7B-$9.5B. At the time, analysts were expecting Qualcomm to report Q2 EPS of $2.26 on revenue of $9.55B, but those figures have since fallen to $2.16 and $9.1B, respectively.

SUSQUEHANNA UPGRADE: In mid-March, Susquehanna analyst Christopher Rolland upgraded Qualcomm to Positive from Neutral with a price target of $140, up from $130. In April 2021, the firm called for the top of the semiconductor cycle, but in March 2023 called for the bottom in this cycle, at least for consumer, PC, and handset-related names. Asian checks suggest Chinese handset sell-through was better for both January and February, which the analyst calls "the first positive surprises in our data for over a year." Rolland also believes Qualcomm's push into the midrange "comes at a fortuitous time given China's reopening" and it sees the Apple (AAPL) business as "now de-risked."

EU CHIP SUBSIDY PLAN: Last month, the European Commission said it "welcomed" a political agreement reached between the European Parliament and the EU Member States on the European Chips Act, proposed by the Commission on February 8, 2022, including on the budget. "Semiconductors are at the center of strong geostrategic interests, and of the global technological race," the EU said. "For this reason, the Commission proposed the European Chips Act, which strengthens European competitiveness and resilience in this strategic sector... Recent shortages of semiconductors have highlighted Europe's dependency on a limited number of suppliers outside of the EU, in particular Taiwan and South-East Asia for manufacturing of chips, and the United States for their design. To respond to critical dependencies, the European Chips Act will strengthen manufacturing activities in the Union, stimulate the European design ecosystem, and support scale-up and innovation across the whole value chain. Through the European Chips Act, the European Union aims to reach its target to double its current global market share to 20% in 2030. ...In addition to the Chips for Europe Initiative, the second pillar of the European Chips Act will incentivise public and private investments in manufacturing facilities for chipmakers and their suppliers. This will contribute to the overall public investments in the sector estimated at EUR 43B."

DIVIDEND: In early March, Qualcomm announced that its Board of Directors has approved a 7% increase in the company's quarterly cash dividend. The quarterly cash dividend will increase from 75c to 80c per share of common stock and will be effective for quarterly dividends payable after March 23. This dividend increase will raise the annualized dividend payout to $3.20 per share of common stock.

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