Largest mobile processor maker to buy back its shares for $20 billion

Chipmaker Qualcomm, which produces processors for smartphones and laptops with local AI, plans to buy back its own shares for $20 billion and raises quarterly dividends. Thus the company is trying to increase the yield of its securities for shareholders, explains Bloomberg. Shares of the chipmaker at trading on Tuesday rose at the moment by almost 4%, but then slowed down.

Qualcomm's board of directors has approved a new $20 billion share buyback program, the company said. The buyback will complement a similar $15 billion program announced in November 2024.

The quarterly dividend will increase from $0.89 to $0.92 per share after March 26, and the annual payout will increase to $3.68 per share.

The company remains "focused on shareholder returns and realizing opportunities to diversify" its business, Qualcomm CEO Cristiano Amon said Tuesday.

In Tuesday trading, Qualcomm shares rose 3.6%, reaching $134 at the peak. But then the growth rate dropped to about 1.8%.

In February, Qualcomm gave a subdued revenue forecast, noting that the global memory shortage was leading to lower smartphone production at a number of customers, particularly in China. This has led to a fall in share price: as a result, they are now trading 23% cheaper than they were at the start of 2026. Amon is working on transforming the company into a more diversified supplier of chips for cars, personal computers and data centers, but the new areas are not yet compensating for the weakness of the main market - chips for smartphones, explains Bloomberg.

Production of phones is declining due to a shortage of memory modules for them and the rising costs of these components. Major technology companies are buying more and more memory to provide capacity for AI systems. This has led memory manufacturers to shift production to higher margin orders for data centers, reducing memory production for other customers such as consumer electronics manufacturers and the auto industry. As a result, prices for certain types of memory have risen sharply.

Qualcomm is trying to enter the lucrative market of AI components: late last year, the company presented products that should directly compete with Nvidia solutions. The chipmaker said that the first shipments of this lineup are expected next year, and the first customer will be Humain, an AI startup backed by the Saudi Arabian government.

Most analysts (20 out of 36) tracking Qualcomm shares advise to hold them in their portfolios (Hold rating), according to MarketWatch. Three months ago, 17 analysts advised to hold the stock. 13 analysts recommended buying the stock, and three recommended selling it.

The consensus target price is $154.9, up nearly 20% from the closing price on Monday, March 16.

This article was AI-translated and verified by a human editor