IDC and Canalys Data Confirm Smartphone and PC Rebound Continued in Q3 2024

As we get ready for quarterly results Thursday from Taiwan Semiconductor TSM, data from IDC and Canalys confirm that a rebound in both the smartphone and PC markets continued in the 2024 third quarter. Data from those firms also reveal a strong showing for Apple AAPL with share gains in both markets. These figures suggest we'll see solid September-quarter results from Apple, Qualcomm QCOM and Universal Display OLED, but as we saw Tuesday, guidance will be just as important.

Our first look at what those three holdings could say about the current quarter will come in TSM’s guidance for smartphone and PC volumes Thursday. While we expect supportive comments for those holdings (as well as for Nvidia NVDA and Marvell MRVL), because of the potential for a strong negative reception to even a modest disappointment, we’re going to collect TSM’s comments and then plan out any portfolio moves as it relates to QCOM and OLED shares.

With less than a 10% upside to our Apple price target of $250, we would need to see upside potential to $270 to warrant revisiting our Two rating. Other color for iPhone that could help influence that will come when key smartphone suppliers such as Qualcomm, Skyworks Solutions SWKS, and Qorvo QRVO share their December-quarter forecasts.

Q3 2024 Smartphone Market Rebound

IDC has released its preliminary figures for smartphone shipments in Q3 2024, which shows them rising 4.0% year over year and just under 11% compared to Q2 2024. These figures, and similar ones from Canalys and other third-party research firms, confirm that the smartphone market rebound continued during the quarter.

Those overall industry figures reaffirm our view on Universal Display and Qualcomm, but it’s the big market share gain by Apple that solidifies our stance on that name and explains the recent surge in AAPL shares.

Rebound in PC Market Also Continued in Q3 2024

Examining Q3 2024 against Q2 2024 PC industry shipment data confirms the expected rebound in that market is also unfolding.

Research firm Canalys finds the strength in the Q3 2024 PC market was due largely to enterprise demand fueled by the upgrade to Windows 11 and the early adoption of AI PCs. We see AI adoption accelerating as more models come to market, and as we enter the year-end holiday shopping season that could bring significant promotional activity. Such activity could also lead to a pickup in the consumer market.

Because the other aspect of our Qualcomm thesis centers on its benefiting from the AI-on-PC upgrade cycle, we’ll continue to follow that adoption curve in the coming quarters. And in looking at the volume between the smartphone and PC market, we’ll remind you that Qualcomm’s average smartphone chip price tag is around $200 but is near $700 for its PC solutions.

More Pro Portfolio:

At the time of publication, TheStreet Pro Portfolio was long AAPL, QCOM, OLED, NVDA and MRVL.