12:59 PM EDT, 08/01/2024 (MT Newswires) -- Qualcomm's ( QCOM ) handset revenue hurdles in H2 may be countered by "increasing investor enthusiasm" for artificial-intelligence prospects, Morgan Stanley said Thursday in a report.

"The reemergence of Huawei as a major player in the Chinese market is a headwind," while analysts "certainly see potential for what AI developments could bring to Qualcomm ( QCOM )," Morgan Stanley said.

Qualcomm ( QCOM ) on Wednesday delivered "solid" fiscal Q3 results and guidance, though some comments on the outlook reflect "conservatism," possibly from looming handset hurdles, Morgan Stanley said.

Qualcomm ( QCOM ) reported fiscal Q3 non-GAAP diluted earnings of $2.33 per share, up from $1.87 a year earlier. Revenue rose to $9.39 billion from $8.45 billion. The company expects fiscal Q4 non-GAAP earnings of $2.45 to $2.65 a share on revenue of $9.5 billion to $10.3 billion.

Qualcomm ( QCOM ) said initial AI personal-computer sales are "exceeding their expectations" with "multiple opportunities for upside" on the company, including Apple sales optimism, Morgan Stanley said.

Morgan Stanley cuts its price target on Qualcomm ( QCOM ) to $207 from $220 and maintained its equalweight rating.

Shares of Qualcomm ( QCOM ) dropped 8.9% in recent trading Thursday.

Price: 164.90, Change: -16.01, Percent Change: -8.85