TLDR
- Qualcomm announced a new $20 billion stock buyback program on Tuesday
- The buyback is on top of the existing $2.1 billion repurchase plan, which has no expiration date
- QCOM stock rose more than 3% on the news, after falling over 24% year-to-date
- The company also raised its quarterly dividend 3.4% to $0.92 per share, or $3.68 annualized
- CEO Cristiano Amon pointed to stockholder returns and ongoing business diversification
Qualcomm’s stock has had a rough year. Down more than 24% since January, Tuesday’s announcement gave investors something to cheer about.
The San Diego-based chipmaker said its board approved a new $20 billion stock repurchase program. QCOM rose more than 3% on the news.
The buyback comes on top of a remaining $2.1 billion in authority from a program announced in November 2024. The new program carries no expiration date.
Qualcomm also raised its quarterly cash dividend by about 3.4%, moving from $0.89 to $0.92 per common share. That puts the annualized dividend payout at $3.68.
The dividend increase will take effect for quarterly payments made after March 26.
CEO Cristiano Amon framed the move as part of a broader focus on returning value to stockholders. “We remain focused on stockholder returns and executing on our ongoing diversification opportunities,” he said.
The timing of the buyback isn’t coincidental. Qualcomm’s stock has been under pressure due to a global memory chip shortage, which has slowed handset manufacturing among its key customers.
Memory Crunch Hits Customers
Smartphone makers — the core of Qualcomm’s customer base — have been squeezed by the memory supply crunch, dragging QCOM down with them. Apple and major Android manufacturers all rely on Qualcomm chips.
That pressure is part of why the stock’s year-to-date decline has been so steep, and why the company may see the current price as a buying opportunity.
Diversification Push Continues
Qualcomm has been pushing hard to move beyond smartphones. The company has been working to break into data center chips and the autonomous vehicle market.
That strategy is partly a hedge against exactly the kind of smartphone-driven volatility the company is experiencing now.
The $20 billion figure is a substantial commitment. For context, Qualcomm’s market cap heading into Tuesday was in a range where a buyback of this size would represent a meaningful chunk of the company’s total value.
Qualcomm did not give a timeline for completing the new repurchase program, given it has no expiration date.
The quarterly dividend increase will be payable to shareholders of record following the March 26 effective date.
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