There's a good reason for Qualcomm's post-earnings stock dip

Spear Invest founder and chief investment officer Ivana Delevska and Defiance ETFs CEO and chief investment officer Sylvia Jablonski join Market Catalysts host Julie Hyman to explain why Qualcomm (QCOM) stock isn't moving to the upside after the company's earnings report.

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Video Transcript

00:00 Speaker A

AMD trading lower along with most of the semi complex. And more broadly here, it has been a pattern that we've seen throughout this earnings season, tech companies beating estimates, even raising their forecast, and the stock falls. We're seeing it again this morning with Qualcomm. So let's dig into what that reflects about the AI trade and where investors should be positioned right now. Joining me, Ivana Delevska, Sphere Invest founder and CIO, and Sylvia Jablonski, Defiance ETFs, CEO and CIO. Ivana, I want to start with you on this Qualcomm example specifically because again, we we've been seeing this playbook sort of throughout earning season. Um, here, it looked like Qualcomm had a pretty good quarter and the stock is falling. So, what gives here? What's your perspective?

00:54 Ivana Delevska

So Sylvia, what we've seen this earning season is that it's all about positioning. So it's really not so much about what the companies are reporting, but more about how investors were positioned going in. Specifically to Qualcomm, they announced a new data center chip few weeks ago. So the stock was up on that going into their earnings. They didn't quite provide any additional detail on their earnings. They said that more details will be coming next year. and this is why you're not seeing an outsize positive reaction to the beat.

01:23 Speaker A

Um Sylvia, what do you think sort of more broadly here? because it's not unusual to see um this. We've seen it throughout earning season where the numbers initially look okay, but then the stock's been falling. Is does this just reflect this sort of underlying um wariness about the valuation question?

01:45 Sylvia Jablonski

Hi Julie. I I think it's a great question and it's it's really a great point, right? Because earning seasons have arguably been coming in, you know, fantastically. even the companies that perhaps didn't didn't, you know, meet analyst expectations have have done quite well. We're having 80% beats on the top and the bottom line. My take on this is that expectations are so high, you know, there's a lot of talk about overvaluation and essentially any little, you know, deviation from from the perfect report, I think is is at this point going to set investors to to to perhaps take some gains in their positions or or, you know, reduce because they're worried about this overvaluation problem and where we are. But what I would say is, you know, when the market's rallying and these stocks are at all-time highs, which has been, you know, every other day over the last couple of weeks, right? We hear a lot of investors saying, I have a lot of FOMO because I couldn't get in, right? And so here are the dips and if you think AI is going to stick around and you think these companies like Qualcomm, Broadcom, you know, Super Microcomputer, AMD, and Nvidia are going to be part of of AI and and the build out in AI infrastructure, it it's worth considering looking at these names now.

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