Good afternoon, everyone. I hope you had a good lunch. Thank you for coming. I'm Stacy Rasgon. I'm Bernstein's senior research analyst for U.S. Semiconductors, and I really can't express what an honor it is to have our guest here today, Cristiano Amon, the President and CEO of Qualcomm. So Qualcomm, you know, I've covered the stock a long time, and it's been through an awful lot over the last, you know, five or 10 years. As we all know, China to the EU, to the FTC, Apple, Huawei. Wave after wave of attacks against the business model, frankly, from regulators and customers. I think it made a lot of investors gun-shy for a long time on this one, as it really wasn't clear what was coming down the pipe. But I think sitting where we are today, it absolutely, to me, looks like we've come out the other side of this. I'd say virtually every regulatory and customer dispute, either dismissed or settled in Qualcomm's favor. I'd say they have a product portfolio and a roadmap that is probably the best that they've ever had in their entire history, like, coming out the other side of that. I'd say through all of that, it was really interesting that they never lost sight of the end goal, to continue to do what they do best, namely investing and developing the world's best communication and compute technologies. I'd say they now appear set to hopefully reap the benefits of an increasingly connected and connected AI world, and to tell us all about it, it gives me great pleasure to welcome Cristiano. Thank you so much for being here today. Thank you. Thank you. you. Thank you so much. It was a pleasure talking to you. Like I said, I've been looking forward to this one, to this one all day. So in this session, I don't like to talk a whole lot about the near term, but I'm gonna get questions. I wanna just get it over with. Bring it on. Bring it. So, look, things have been rough for smartphones, as we know, for the last couple years, and I think it's fair to say that you and me as well did not foresee how bad smartphones were gonna get over the last couple years. I think they were down double digits at least two years in a row, and we're probably down 20% or 25% even off of the peak. But it does look like they've hit bottom, and I even maybe, dare I say, maybe be improving. I think Android inventories, as you have suggested, have normalized. Your IoT business is growing a bit again, sequentially off the bottom. The auto business looks like it's doing very good. It's growing. I guess, how can investors think about the likely trajectory from here? Maybe you could just remind us kind of what you've said. It wasn't that long ago you reported. All right. But just what are we looking at as we kind of go forward from this point, after we've been through everything that we've been through and that you've been through over the last, like, couple years? Yeah, very good. It's, I think it's a great starting question. Nice to see you, too. Here's one way to think about this. Big picture, right? I think investors first need to look for the things we have been saying, and I think we have been executing with a little bit of steps that are clearly identified. The Qualcomm technology has a number of end markets there, that Qualcomm technology is very relevant, in addition to phones. And I think that the story in auto, the story on PC now, I think there's gonna be other coming- Mm-hmm ... on spatial computing and industrial and so forth. But I think what happened to handsets, I will kind of tell you kind of where we are right now. First, I will point us to maybe our Investor Day. That was just 2021. It was about my first Investor Day when I became CEO, and I said: "Look, here's the Qualcomm strategy. We're gonna be very focused on a market that is fully penetrated. It's a market that's fully penetrated. We accept that there's no growth. It's or it grows with GDP up and down. Uni-unit growth. Yes, unit growth. We're gonna be focused on content. We're gonna be focused on technology. We're gonna be focused on share of wallet. And we even raised the profile of our handset business. If you think about how QCT was from an operating margin standpoint and what it is, really focused on share of wallets, tech, wallet technology, and value. As a result of the steps that we took and investing in the Snapdragon portfolio, you saw our historical share with Samsung, which would be about 50%- Mm-hmm ... now operates at a higher level in the 70+, share point. We have been well designed in for all of the premium- Mm-hmm ... smartphone and Android. And what we see in handsets, now that we went to the shortage of semiconductor, the demand, the skyrocket, all the way to the correction at the bottom, what we see now is it's stable, but there's one thing that is positive. Mix continues to improve, and it's being reflected in our numbers, which mean in a market that does not grow, we have been growing content, and we see a mix improvement, especially towards the high end and premium tier. And a little early to say, I'll be careful when I say this, but positive early signs on AI use cases- Mm-hmm ... coming to smartphone, which drove the next wave of launches of flagship. So at this point, we feel you're, I think I have a positive bias on handset, which is a flat market with an upside bias, but I really like the fact that the mix continued to improve. Mm-hmm. Got it. I mean, remind me, your, your chip business collectively has grown at, I don't know, 20% CAGR or something over the last, I don't know, four or five years. I, I ran the numbers the other day. But even while smartphones were falling 20% or 25% from the peak, and so a good amount—some of it was auto and everything, but a good amount of it was that, that, that content. Do you have any feeling for how much your content has grown— Yes ... just generally over the last, like, four or five years? A couple things to describe in this whole conversation, because I remember several years ago, and you and I have this conversation, the first big wave of content change for Qualcomm was the 4G to 5G transition, where we said when we go from 4G to 5G, we have more modem content, we have RF content. But that changed. I think 5G transition, especially on the flagship, happened back in 2020. Yeah. Right? So we've been now in there for several years. What is really changing is the amount of computing. Mm-hmm. More and more, a more capable processor with CPU, GPU, and of course, NPU. The other thing that is happening is you probably understand there's a different correlation on units. When we sell a modem to an iPhone, for example, but when we sell a full Snapdragon into Android, I think in terms of ASP content, it's like 4 to 1- Yeah. -five to one, depending on that. That has been also a vector, especially in China, for content increase. Mm-hmm. Got it. So let's actually talk about, I guess, the future drivers of content, and this is AI smartphones. Although the way you were just talking about it feels like it's maybe more than just AI. You talked about CPU and graphics and GPU and NPU, which is the neural processing, which is the added piece, which I gather is an evolution of the Hexagon DSP that was in there already. There's other things. There's video processing and camera- Absolutely ... RF and all, all sorts of other things. Maybe if we can just sort of at a high level on sort of content expectations a little bit, and then I, I absolutely want to drill down into the AI story and the AI at the edge. But, how should we think about those different pieces of the puzzle that you supply, in terms of driving content? And, and I guess maybe starting at the premium tier, but even just more broadly, like, how do we think about that? Yes. First of all, I will... we'll talk about AI later, but there's—I will make a side comment on this because it's relevant to your content question. Interestingly enough, AI is actually bringing the modem again to the front and center because especially of latency, when you talk about, you know, text or voice or audio, voice becomes relative importance again with AI. So I think there are cycles of advancement on the modem. Of course, our RF attach is one, but the biggest change has been the capability on the processor in continue to increase computer vision, camera. NPU, silicon area continues to grow from generation to generation, and we see significant improvement in terms of the AI processing capability, even more than you see in graphics. Mm-hmm. And I expect that cycle on the AI to continue. Okay. So I guess, what does it mean for content, though? So, again, I mean, if you're selling a high-end part for $100, is it... 'Cause you, you've been- I think you've grown your overall, like, content was out of 15% or 20%, like historically. Is that the same kind of level we ought to be expecting going forward, or is it lower, or? It's probably similar. Like, I'm not trying to provide a chipset ASP, but we have seen ASP went up generation after generation because of content. Mm-hmm. We have seen those kind of growth rates. Mm-hmm. Really depend on the tier, on the product, but it's very healthy, and it's really changing from comms to computing. Mm-hmm. Mm-hmm. Got it. So let's talk about AI, AI smartphones. And I'll be honest, like, I, I understand that people are buying, they're getting delivered and... Why do I want an AI smartphone? What am I going to do with it? And I know along those lines, you guys have been doing a fair amount on the ecosystem work, and you've been doing software and OS support and pre-trained models and things. So you have probably a better view than most on the types of things that people can do with one. But, like, why do I want to go out and buy one? Okay. So let me... Hopefully, we have time because this is an interesting topic of conversation, and I don't want to take away from PCs and outside. Yeah, there's all sorts of other stuff we gotta talk about. So I'm gonna try to be brief, but I want to be a bit provocative, okay? Because, you know, like, when I look about Qualcomm, we always make big bets, and sometimes you have to see before it happens. And yes, there's always things sometimes happen at different pace, but I've seen a similar movie before. I like, I like to talk about this, providing this example. So we go back to 3G, and we had our BlackBerrys and our Nokia phones. Mm. And then what happened at that time, the experience was actually provided by the provider of the phone. It was the same. And at that time, there was a Symbian app store, you have a BlackBerry app store, but most of the experience was used by... Then the smartphone arrived. The smartphone arrived. The big deal was there was a computer, but when it arrived, the existing company said, "Oh, I can do an OS, too." And there was a BlackBerry OS, and Nokia did MeeGo and Maemo, and they said, "Look at those 10 apps. They're there. I can recreate those apps." But it quickly, quickly, the 10 apps became 100 apps, 1,000 apps, hundreds of thousands of apps, and that was the experience. The experience was the app. Mm-hmm. It wasn't the actual UI of the phone. Mm-hmm. That's what changed. So when we think about AI on phones, and it's important to understand that AI is on phones, different AI is on PC, different AI is on glasses, different AI on cars, different experience, but especially on phones. Back in 2018, that feels like six years ago, we put the slide when it was celebrated 5G, and we said, "Every generation of wireless has one thing that happens with it." When we said 4G, was 4G, and the computer in the palm of your hand. It was mobile computing. We said, "5G is gonna be AI." And it was very clear when we didn't have a very good understanding how AI would evolve, especially a Gen AI model. But it is now clear to us that a Gen AI will change the human-computer interaction. So let me give you an example. Every single app could theoretically apply an AI front end, whether they get the AI from an open source, whether Llama, whether they get their OpenAI, whether from- Mm-hmm ... from, from Google on the front end. Think about this, like something as simple, if you go to your banking app that is based on APIs that go into the bank cloud to get information, you could ask the AI. The AI get the same information. It could eventually, even if you want to, render to you like your app renders. So what happens is those platforms are changing very fast. That's the reason we did the AI Hub. The reason we did the AI Hub, which is applicable not only to phones, to cars, to everything- This is your collection of models, by the way? We have now over 2,000 developers. Actually, for you to understand how it works, you could have a model that gets quantized and get optimized to run at NPU. You could get that model, attach it to your app, push that to the app store, and you can start your app. You can have that model interface, and from that, the model can do many things. So the point that I'm trying to make it to you is, we're starting to see now the same pattern. We see a few use cases. Mm-hmm. You saw Live Translate, you saw Circle to Search, you see photo editing, you remove somebody from a picture, add somebody from a picture. But I would say we are just at the beginning, and I like to provide the following example just to finish that answer. We have seen historically, over generations, there are more you can do with your phone, not less. Always more you can do with your phone- Yeah. And that's why we're increasing so much content and computing content into the phone. So there are things today that you can argue, "I have to answer this very long email right now. It's very complicated. I'm gonna wait until I get to my laptop." But with the Copilot, you can probably start doing certain productivity on your phone that you would not do it otherwise. With this different type of AI interface, that it can help you get things done, create an image or something, you'll be able to do on the phone. So I think AI on the phone is gonna be probably as natural as apps or, or apps are gonna evolve- Mm. And we're just at the beginning of the transition right now. Got it. How long do you think it takes until we see...? Is that, that's the unknown at this point? That's the unknown, but I'll say, here are the things that I like. The trend is going to the way we want it to be. We started to see all the flagships now with AI capabilities. We started to see some of the use cases being developed. Mm-hmm. They're developed by the OEM, they're developed by the ecosystem players, they're developed by the OS players. Mm. and we're starting to see a lot of developers Mm-hmm ... get interested in bringing an AI front end to their apps. So it's reasonable to say, within the next five years- Mm ... this could be, you know, how we're going to interact with our phones, and it's gonna feel natural to us. Is it fair to say you guys aren't trying to monetize the AI Hub, are you? Look, no. Right now, no. The AI Hub, it's a unique thing that we have developed. I think there's nobody that has anything like that for the edge. And it basically, what it is, is you can bring your own model. It gets, it gets quantized, optimized, available. We actually build even a device cloud. You can, as a developer, you can test it on the target device in the cloud that's actually hosted in AWS, and you can deploy that. And we just launched. We have over 2,000 developers, so that's exciting. It shows how much activity is- Yeah ... where people thinking about a front-end AI for their apps. At least it must give you some visibility, too, in terms of what's going on and what- Absolutely. Absolutely. Okay, that makes sense. Let's talk about PCs- Oh, yeah ... a little bit, as long as we're on the AI device topic. And so this is interesting. So I, I was making the point earlier, like, like, like, first I want to try to just aggregate. We, we talked about ARM PCs and AI PCs, but I, I think the AI PC is what's being used to sell the ARM PC narrative to the end customer. That's my re... Maybe I'm wrong, but is it-- would you say that's, that's true, or? Partially. Okay. You're not, you're not entirely incorrect, but there is something fundamental happening- Uh-huh ... which is actually, it's the combination of a transition- Mm-hmm ... transition of a PC to a different architecture, happening at the same time that there's a transition of Windows. So I think those are two distinct things that happen to be at the same time, and I think at the end of the day, to be very direct and honest, I think the true AI PCs- Mm-hmm ... that Microsoft put together is really the Copilot+ and it happens on the Qualcomm architecture. But I have a lot of things to tell you about this. It's actually important to break this down. So I'll start in reverse order. I'll start talking about Windows before I talk about what we're doing with Microsoft. Okay. This is my personal opinion. I'm sure Microsoft's not saying that, but I'm saying that I saw some articles in the press about this. I think this is a big transition of Windows. It may be as significant as- Mm ... Windows 95-type transition. And the Copilot+ is this AI that is very pervasive, that runs all the time. Mm-hmm. It runs all the time. And you started to see what happens when you run all the time. There's a tendency right now to think about AI in the cloud, and what you do on devices, just you get the stuff from the cloud you're doing on device, is different. They're actually developing different. The use case, the application is different. So I'm gonna give you just some examples of the use cases announced by Microsoft when I talk about the Copilot+. One is Recall, and think about this. You're indexing, you're running, you're running this computing engine, and you're indexing everything that happened on that screen, every pixel. And then you just tell the machine, "I saw a YouTube video like this with this content a week ago." It say, "Here's what you saw." "I went to a web page." "This is what you saw." "I saw a document that has this, from Stacy Rasgon, that has this particular chart saying Qualcomm is awesome." "This is what you saw." So this thing is a different use case. Now, let's shift it to another use case of PCs, which is a communication device. Mm. Teams. The ability to actually add subtitles in any language to somebody that's participating, talking a language you don't understand. This is like, it's a new use case- Mm It didn't exist before, on something that you do on PCs. What I like the most is the whole concept of co-creation, for example, what they did with Photos and Paint, and you have a lot of company. If you're doing ideation- Mm-hmm. Think about this: you're creating an image, you're doing photo editing, you're doing video editing, creating something new. Think about this. You create something, you say, "I don't like it. I'm gonna do it again. I don't like it. I'm gonna do it again. I don't like it." Every time you run this 100 billion, multiple 100 billion parameter in the cloud, who's paying that bill? Mm-hmm. But once you do it on the device, it's a whole different story. So I think there is this big change in how the operating system is gonna work, and now I'm gonna go from that to what we're doing. I think we went on a mission, and our mission had three different vectors. I'm glad that we got to this point, and I think it's showing that we executed on it. One mission was the desire of Microsoft to change to Windows into an Arm instruction set. Mm-hmm. We went on a journey with them. We knew we had to launch multiple products with them to get to this point, to get the ecosystem ready, applications to be native, the emulator, et cetera. You've been making chips for Microsoft laptops for, since what? 2016? We had a journey- ... Yeah. remember, it was not until Windows 11 that you could run Win32 apps on the emulation. You gotta get the emulation going, you have to get all of the ecosystem. That's one vector. Mm-hmm. The other vector is, we needed to bring the performance leadership to the Windows ecosystem. Mm-hmm. I think we did that. It's good to see a company like Qualcomm, that we're telling investors: "You look at us as a comms company, and we're telling you that we're actually a connected computing company." I think when we have the performance leadership in PC, it's like graduation day. Mm-hmm. That's kind of where we are. That's the second vector. The number three vector is this transition of Windows to AI. And there is a reason, for example, when you saw the Microsoft Copilot+ launch and 22 devices from Lenovo, Dell, HP, Acer, Asus, Samsung, everybody, and the entire Surface line, all on X Elite. There was a reason for it. Mm. The reason is very simple: it won't run on, on anything else. Like, when you think about this AI running, and I think there's a lot of confusion in this space, the CPU is busy, has a job to do, the GPU is busy, but now you have this other computing that is running all the time. When the Copilot+ run on Qualcomm, it use, for an entire battery life of that device, it consumes about 20-30 minutes. If you run on the best that you can buy from the incumbent, the fastest you can buy from the incumbent today, 5-6 hours. So, so that's kind of the, the different conversation is. That, that's the reason I think initial launch you only see Qualcomm, because it simply won't run unless you have a completely different equation. So, so we like that. Mm. We think its AI becomes a tailwind- Mm ... for diversification into the PC space, and because we're new to this- Mm ... we don't have any share. It's just a great expansion of the model. Yeah. Do you think that continues? I mean, I understand the current products from the incumbents don't really support this kind of... They've got new products that are coming that will, in theory, support. I'm starting to get a little bit of, like, maybe why consumers would want an AI PC. Is it a stretch to have to go and convince them to buy the Arm-powered AI PC versus the x86 one once again? 'Cause it's, like, new and weird and different, maybe. Like, what is it about the Arm-powered, the Arm architecture in particular, that you think is superior to x86? Like, assuming, like, similar AI- So that's the reason, I think, when you first used that argument, I said, "You're partially correct. Uh-huh. And here's the part that I agree with you. If you have to go to the point of sale, and you tell the consumer, "This PC does everything the other PC does, everything, but the instruction set is actually running on an Arm- Mm-hmm. Okay?" Then say, "What's the real value proposition?" However, when you say, "This PC change- Mm-hmm. This PC is the Copilot+ PC, it's a different experience altogether. Mm-hmm. On top of it, it has 22 hours of battery life- Mm-hmm ... it's a very thin form factor." Then it changes the conversation exactly to the point that we are right now, which is the incumbents are saying, "I will have that too. Wait for a little bit. I will have that." And I think that is what's really changing the conversation. We see that with Best Buy, we see that with Currys, we see all the retailer. This is something new. It's this new AI-powered PC, this new experience provided by Microsoft, and some new experience from different developers, we don't know where they are yet. Mm-hmm. Got it. Do you think other players in the Arm space, and this is good or bad for you? Fantastic! I could- Fantastic. Okay. I'll tell you the reason why. First of all, when other players coming in with an Arm-based CPU for the PC space, the first thing it validates the SAM, that, that's an Arm SAM. Mm-hmm. Done, right? That's. It changes the conversation. Mm-hmm. The second thing, for us, is... Look, if you look, if you look at where we live, the neighborhood that we live, right? Phone is probably incredibly competitive in a concentrated environment. When we enter into auto, everybody said, "Look at who's there. Everybody's there. Mobileye is there. NVIDIA is there. You're gonna go into auto, how are you guys gonna be able to compete? Mm. I think for Qualcomm, this is good. I think we feel good about our DNA- Mm ... which is about competing in very markets that move very fast, and we like, we like our differentiation. It's just performance for watts. That's what we do best. Got it. I guess, is the first, like, big use case coming out for smartphones, is that... Are we all waiting for Apple now? Is that... we're waiting to see if they do something with that? Look, I think one thing that'll be great for the industry, if they come in with great use cases or a platform that a lot of, and an engine that a lot of developers are going to come up with a new experience, this is gonna have- Yeah ... a positive cycle, and actually will accelerate the- Yeah AI smartphone upgrade. And I guess on the PC side, they've taken shares since they started introducing their own Arm-powered PCs, so- Well, I think the question- They're creating an experience. The question that you have to ask is, what is the difference between the Snapdragon X Elite for the Windows ecosystem? Is it restore the performance leadership for the Windows ecosystem- Mm. and it's just. And so AI is a new thing, which is very unique and differentiated from Microsoft. And then what Snapdragon X Elite is the fastest CPU and is the best battery life. Mm. I think that is what the competitiveness that now the Windows ecosystem has, and it got back to the front of the line. So what would you consider success in the PC? Like, like, the PC market's, you know, 250 million units, give or take, is... What would be success? Is it 20%? Is it, is it 50 million Arm PCs- Look- you get half, and like, I don't know how to size it. Is that- Okay, we're not making share assumptions, but I can- Uh ... I can, I can give you, like, an, a proxy answer, if I may. Yeah. First of all, the reason this is great for the Qualcomm model is because we don't have any share. Like, we- Yeah ... we're just starting, right? So everything is gain. Second thing, when you think about our model in phones, most of the contribution in terms of gross margin and operating margin comes from the high-end premium tier. Mm. A PC product for that we build, we build a portfolio that go from $600 and above, laptop. Mm. That's like a premium SoC. Mm. Is equivalent to a premium smartphone. No, no matter what you're selling there. Okay. So it has some of the attributes from a financial standpoint that you see on our model from selling a premium smartphone. So think about this, this is like, this is, like, better than expansion of the premium tier- Mm - in handsets. So, the margins on the PC chips should be higher on average than the margins in the handset business? Look, without making a margin statement- Uh ... I think you should assume that the content is- Mm ... much richer, ASPs are higher- Mm-hmm ... given the performance, and that's kind of our sweet spot- Mm ...in our Snapdragon portfolio. The other part of the answer to the question, the more the... Just put yourself in Microsoft's position, right? So what we like about it, if you look historically in the PC side, where you have the stronghold of the x86, where the enterprise, and the enterprise will be very slow to move. Let's say you launch Windows 10, enterprise said, "I'm gonna stay on Windows 7 a little longer." You launch Windows 11, the enterprise is gonna stay on Windows 10 a little longer. There's something that is different now, especially when the Microsoft Copilot, the Microsoft revenue model- Mm ... for the Copilot, Microsoft is driving a transition of the enterprise to Windows 11, to AI PCs. That is helping us having a bigger addressable market first. And even if you model, like, we have 10% share, it's a significant, I think, upside for Qualcomm. Mm. We feel like we're well positioned, but not only because we have the best performing chip, but we're the only one off the gate that can run Copilot+, so we like our chances. Got it. Got it. I don't really wanna ask about Apple, but I'd be remiss, unfortunately, if I didn't- Go ahead ... ask about Apple. So I mean, what is the current baseline assumption now? It's the iPhone that launches in 2026 is when they start to go away, or? Whatever we said, we have been very transparent- Yeah ... with Apple in our model. So when we extended and renew the agreements, we highlighted, we expect that, you know- Mm ... at 2026, it starts to go away, and that's the assumption right now. Got it. Any risk to the royalty business, if and when that were to happen, or does that- Mm. Do we assume that stays? Not really. I think there's a tendency, I think, of folks to connect the chip and the royalty business, even though I think the court decided that even if they were together, it was okay for Qualcomm, even though we don't do that. And I think it's basically is royalty is independent, whether Qualcomm chip- Mm ... is utilized or not. I think we feel really good about- Mm-hmm ... a situation that we have to litigate our patents, and we- Mm ... had good outcomes. So it's not like you even know what are the IP- Mm ... that is already been determined. We feel the licensing business probably- Mm ... at a stable point- Mm ... in its history right now. Got it. And is it fair to say that at least in the near term, your content at Apple seems to be going up, not, not down? I know... Again, I don't know how much you want to talk about what they're doing, but clearly, you have a RF competitor of yours that seems to have lost some content. It looks like it's gone to you guys. Maybe more generally, how do I think about what sort of the integration between the RF and the modem is actually doing? Because I think that's a trend that's helping, like, beyond whatever is going on at Apple. Look, without speaking on anything Apple- Yeah ... I think we have developed a competitive RF front-end portfolio. Mm. I think from a performance standpoint, I think we have been differentiated, and we have seen, I think, a good interesting- Mm ... across the industry for our premium RF components. Mm-hmm... Yeah. Let's talk about auto- Yes and the broader diversification theme here. So you just recently took your pipeline numbers up, right? I think from $30 billion to $45 billion. Thirty billion- First of all- Forty-five. What does pipeline mean? It means, see, the beauty of auto is when you get a design win, and you have, in that design win, you have a- These are confirmed designs. I mean, this is not like we're engaged, we're trying to win. No, no, no, no, no. These are actually confirmed designs? It's a little bit more than that. Okay. Those are confirmed design wins with an associated agreement that has basically you have very well defined, for the particular model, the content over the years, over the volume of that model. I think one thing that is good is because we're designed with virtually every car company right now, we have the ability to see the overall market very well calibrated. I think the reason we have been disclosing the pipeline is because it's a very stable, and that's why we, you know, how the pipeline converts into revenue, we have been delivering on that on a- Mm ... quarterly basis, regardless of how the market changes up and down. For us, it's a story of new models with our content- Mm ... It's a share story, and we're tracking to the statements we provide, $4 billion and $9 billion. Right. It's just according to plan. It's actually a very predictable and reliable business. Did those targets already imply that the pipeline was going to expand? Because you didn't raise the targets when you raised the pipeline. No habla English. Sorry. How far does the pipeline go out, by the way? How many years? Look, right now, we have, we're participating in RFPs for- Uh ... cars in the 2027 time frame. Okay. So a lot of the design wins for cars launch in 2025, 2026- Mm. some in 2027. Got it. What, what kind of things actually drove the $15 billion increase? So one, there's a new disclosure we provide, and some of it was already in the $30 billion, but there was a big percentage going forward. One new disclosure we provided, of the $45 billion, we said one third of that, it happens to be the increase, but even though there are some component of that in the $30 billion before, one third of that is ADAS and autonomy. Mm-hmm. I think that drove a lot more content, especially for AI processing. Mm-hmm. It's all our high-performance NPU. It's like server class performance NPU, and I think we our solution has been resonating. We had a very flexible architecture, sometimes our own stack, sometimes third-party stack, and we had displaced some incumbents that had a very strong position- Mm-hmm ... into that space, especially for autonomy. It speaks to one of the things that have been resonating well with the automotive industry. One is the fact that we have capabilities in all domains, the fact that we actually have the ability to scale the technology up and down from a premium car to an entry-level car, especially because safety and electronics- Mm ... becomes now table stakes in many of those cars. And then it's the power equation. When you put a server-type solution in the trunk of a car, plus cooling, how it consumes energy- Mm ... versus what we do, it's really a- So you guys are not putting a server in the trunk of a car? We have server-type performance- Uh-huh ... but it does not consume as much energy as a server. Okay. Got it. Got it. What does the Arriver acquisition bring to the table in terms of your autonomous efforts? It's a full stack. One, one- It was interesting how you went after it, right? So I won't tell the story here, but- You- Go ahead ... you need to give us an A+ for creativity. Both how we went after and how we structured the deal. Clearly it was important to you. But I'll tell you, I'll tell you what's in, what's important of this. I think, It was a combination of things, right? So Arriver is a full stack for ADAS, and then we also, together with Arriver, we did a very strategic partnership with BMW. Mm-hmm. And, and with BMW, we are joint developing, I think, the stack, for the driver policy, plus the computer vision, and then we have the ability to deploy that at other car companies. Mm-hmm. I think from a BMW perspective, it makes sense. As the stack gets more miles, it gets better. I think it's important. It has been useful in both ways. I think one way for car companies that want to basically partner with us on silicon in the stack- Mm-hmm ... is there's another environment. The car company wants to probably have their own stack, but they wanna have an option if in case they wanna switch to our stack. And then, I think the flexibility of having just the silicon. I think we have the complete proposal, a very flexible model. And one thing that is unique now is Flex, and people should not underestimate, I think, how interesting Flex become for a car company. Flex? Because on a single SoC- Sorry ... Flex, we got a single SoC. We can combine ADAS and digital cockpit on a single SoC. So what you do, if you have an entry-level car, you have now a tiering structure- Mm. -for you to deploy ADAS in an, in an immersive digital cockpit experience. Those are the things that we play- Mm with the assets that we have. How much of the revenue, like, today you're run rating out $2.5 billion, kind of annual run rate-ish, right? It's $600-something last quarter. How much of that revenue is, like, ADAS versus Digital Cockpit versus, like, infotainment or connectivity? The majority of the revenue right now- Mm-hmm ... when the whole started, was mostly connecting the car to the cloud, most of the telematics. Now, the majority of what's in the revenue right now is telematics and digital cockpit, and I think ADAS is gonna start to be material, you know, as we go towards our $4 billion. Is the bulk of the pipeline ADAS? of the 45, 1/3. 1/3 you said. Yes. Okay, got it. By the way, I should have mentioned, I think I forgot, if you have questions, in your program, there's a QR code for you to access the Pigeonhole forums for this, and you can put your questions in, and we will get them as we will have some time at the end, for Q&A. Easy questions only. Easy questions. Who do you compete against most on the ADAS? Is it, is it just NVIDIA or Mobileye, or, like, who do you actually see most when you're going after this? I think, really, the incumbents was Mobileye and NVIDIA. Mm-hmm. I think we're seeing NVIDIA somewhere high end, Mobileye, across the board, and we're the new entrant. Mm-hmm. Got it. I mean, there's only a few with, like, full stack solutions, and- Very- NVIDIA, Mobileye, and I guess, like, Waymo and Tesla do their own thing, but yeah. But the thing you need to important to understand is, from ADAS to autonomy, there's several layers. Mm-hmm. Right? And I think ADAS is probably gonna be in every car. Mm-hmm. The ability to actually commercialize volumes, what is unique about us is the ability to provide a scalable solution to the OEMs. Mm-hmm. Got it. Let's talk about the IoT segment a little bit. So this is one I know you've given targets in 2021, and clearly, we've gone through a bit of a cyclical depressions, and do those targets kind of still stand, but just, I think about, like, the time frame being pushed out? They move, they move a little bit to the right. Uh. I think one thing that is important, Stacy, and eventually, without making a commitment, I think at the next opportunity we have, maybe at the next investor day- Mm-hmm ... we probably need to think about how we communicate, because there's a lot of things in the IoT, and they all- Yeah. What is in there, exactly? Yeah. Yeah. The way you should think about our revenue streams today within QCT, we have handsets, we have auto, and then you have what we call the IoT segment. There's a lot of things in there, and they are not things of the same nature. They're very- Yeah ... different. That's why I think eventually we have to start breaking that down. First thing you see that in there is PCs. Mm-hmm. So PCs in that segment, that which today is- Today is small. ... negligible. Yeah. And it's going to start it. Today, mostly you see revenue is Android tablets- Mm ... is in the compute segment. That's gonna start to become material fiscal 2025, all those laptops launching right now, summer back to school. Mm-hmm. That's one thing that is in there. The other thing that is in there is spatial computing. Okay. Mixed reality, virtual reality, augmented reality. I think we are in the very early stage of that market. VR, it's in the tens of millions per year. But I think- Of dollars or? Units. Units, units. I think the AR has potential to gain scale. Mm. I'm actually very happy about what we're seeing right now with the project we have with Meta, the Ray-Ban glasses. There are other devices coming. That's in the IoT segment. Mm-hmm. The other thing that is in the IoT segment is our Wi-Fi access point business. Yeah. Retail, enterprise, carrier gateway has been one that is growing. Most people don't know this, but we actually also develop our own fiber asset. We have XG-PON, and we've been growing the carrier segment as well for Wi-Fi access point. Also in that, it's our wearable business, our industrial business. Mm. That is, when people think IoT, they think industrial IoT. Yeah. That is in there, but it's not the biggest segment. I think it has a lot of potential. So all those things are in this segment right now. What we have seen is, when the business were there, was the traditional business, which is the tablets and wearables and some of the modem connectivities. We've been through the industry, I think, correction to happen in broader IoT. Mm. But now, the new is coming to the segment. The new is PC, the new is spatial computing, and what we call industrial NEX, which is- Mm ... less about connectivity, more about computing, AI at the edge, et cetera. Got it. Got it. We've got 8 minutes left. We've got some questions here. Like, should we go to the lightning round? Yeah, rock and roll. Can you discuss China risk? Could they stop paying license fees as retaliation to U.S. sanctions? And I can think of other China risks, frankly, but Yes. How do you think broadly about that? Yes. Look, I think, everybody that is in the semi industry is gonna get a China risk question. I will kind of unpack this in the following way. First of all, if you have a leadership position in semi, you're gonna have a big business in China. And it's just the nature of the beast. Actually, in the last earnings call, we made some more detailed disclosure about our business in China, what stays in China. Mm ... what is from China, going to other markets, so people understand it. Second, we've been fortunate enough to this point that we have not been restricted in some of the markets that we operate. We're not restricted on phones, and we're not restricted on PCs. Mm-hmm. We're not restricted in automotive. Actually, we're designed with all the Chinese EVs. I think we have been, to the extent that we can, I think, continue to play our role on the dialogue, I think, between the two sides, where we're become an important ingredient for Chinese companies that have export ambitions, especially. So I think that's probably as good as an answer I can give it to you. I think there is, in general, I think from a semiconductor industries, the geopolitics in the US, China, is something- Mm-hmm ... that is important to watch. I think at this point, it has not impacted us. As we diversify the company, we have seen actually more traction in China and lot less traction in China, and we have to continue to monitor the situation. Yeah. Yeah. I guess just the last bits of Huawei revenue are now out of the model because of the most latest sanctions. You held guidance for the quarter in the way. Yeah, you called that correctly. We had said it will be out of the model in 2025. It's very simple, actually. Our license was for 4G, 4G chips. We never had a 5G license. Yeah. 4G chips. And, China, if you look at the deployment of China 5G and where their domestic 5G is penetrating down the tiers, we expect that there will be no demand for 4G phones in 2025. The only thing that really happened is it happened that in the model two quarters ahead of its time. Mm. That's it. Got it. Got it. How do you think about the potential application of M&A to drive value, or Qualcomm's days of attempting larger transformational M&A finished? Look, we have been clear with our strategy. I think our strategy, like, we're, we're not changing strategy. We're actually executed. You probably see there's a little bit of a logic behind the madness. So you saw, we put the strategy together. We've been executing. Auto was the first one everybody saw. Now PC, people are saying, "I think spatial computing is gonna be the next one, that people are gonna see it, then industrial, and so forth." We've been executing on the strategy, and we have been actually very, open about M&A that accelerate that strategy, something very interesting doing. We have done some smaller acquisitions that were important for- Mm ... for executing. We talk about Arriver and the role it had in auto. Yeah. Nuvia was important one for the role it has on PC. So we are very active. One thing that I'm gonna say is the current environment, we're very focused in evaluating things that are actionable. Mm-hmm. We're not focused on things that are not actionable. Got it. Got it. And just a general, like, use of cash, like, in what... Are you keeping, like, powder dry for, like, bolt-on or technological innovation? Look, we had returned a lot of capital. We had consistently increased the dividends, and I think we did that this year as well. And, we are preserving optionality on our balance sheet- Mm-hmm ... especially, for the things I outlined. We've been executing on a diversification plan with- Mm ... a certain discipline, and we look, there are things that we can do that will accelerate the execution- Mm ... like the examples I provided. Got it. How flexible is your supply of Snapdragon Elite processors if demand is very strong? That would be a good problem to have. Look, this is a very good question because we had a lot of internal debate, especially because as you go to a new market, and there's a lot of things that are new, especially about the Copilot+, and how to forecast. Mm-hmm. So, we look at our supply chain, and we decided to play for success. Mm-hmm. We'll see how that evolves. How do you think PC gaming could be affected with the PC shift to the Arm architecture? I am so happy I got this question. So thank you for whoever asked this question. This is a very good question because often people ask me: why do I need AI for this? Why do I need AI for that? Why do I do AI on the cloud? Why do AI on device? So without naming names, I don't wanna make any product announcement, but I want you to understand because this is actually easy to understand. So the first thing, when we enter the PC space, and the simple answer to your question, we have the top 1,200 titles, Microsoft, Qualcomm, and us working with all of the gaming companies, we've been optimizing, make sure it's running, it's optimized to the GPU. We're doing all those things so it can run on the Adreno GPU with Qualcomm, on the Snapdragon X Elite. So we're coming off the bat with the top 1,200 games, and the list will continue to add. I think that's an important thing. But you have now something different. You have the GPU that you always talk about, "Can I render the game?" But now you have this big NPU AI engine. So a lot of big game titles are in conversations with us, as well as Microsoft, because they're very interesting about the role of the NPU to create an NPC. Think about an RPG game. Think about a game that you actually have a character, that you have a dialogue with it, and think about that being a large language model, for example. I think game experience is gonna change over AI, and it's gonna change over AI, where the GPU has a role to play, but the NPU has a role to play. That's actually very exciting. Mm-hmm. We're very excited because it could be eventually another reason for people to buy an AI PC. Okay. But these are not being positioned as gaming PCs yet, though? Not been positioned as gaming PCs. Got it.... Here's an interesting one. Tesla's Full Self-Driving 12's success is driving demand for Mobileye's similar solutions. How far is Qualcomm away from providing a similar Level 2+ point-to-point driving solution? Look, we have a lot of our engagements is really Level 2+. Mm-hmm. I think that's the reason we're actually doing the joint development of stack with BMW and have other partnerships as well. Mm-hmm. Got it. We've got about 40 seconds left. I will give you your soapbox. Got a whole room full of folks here. Why should investors buy Qualcomm stock now? Okay, so I think it's important, it's really important to understand Qualcomm based on what are our core assets. I think there's a tendency to say, "Oh, look at this mobile market," and I think we've been to the trough in the mobile market, and the fact it's highly concentrated and all of that. But I think if you step back, what are the real Qualcomm assets? Like, what are the elevator pitch in Qualcomm? It's high-performance connectivity. Any type of standard connectivity, Qualcomm is the number one, whether cellular, Wi-Fi, Bluetooth, GPS. Like, recently, we announced something that we're the only one that has this capability in the market. It's micro-power Wi-Fi. It's Wi-Fi, but it has the Bluetooth power profile. So think about this: You don't all of a sudden get an IP address. You can have an earbud, and you can talk to a large language model because you have an IP address in the cloud. Mm. So that's one asset. The other asset is high-performance compute, every form of compute: CPU, GPU, image signal processors, NPU for battery-powered devices, and then we're building the engine for artificial intelligence at the edge. If you just look, for example, some of the things that a lot of the hyperscalers are saying, some of the things that NVIDIA is saying, you start training in the data centers because that's where the data center's available. Now, you're starting to move the data centers where the energy is cheap or energy is available. But once the model's trained and you have the inference, the model move where the people are, and I think we have been really building this engine to run AI at the edge, and it's actually been serving as a tailwind for the Qualcomm diversification. You should look at those three assets that we have and realize that they're new end markets. They're being transformed by technology, and I think we've been, we've been consistently executing on it. Mm-hmm. So I actually look where the stock is right now, and I think it's a multiple expansion. It's actually understanding that not only autos is real, PC is real, and those are different end markets that are actually growth markets. I think spatial computing, we're going to see that evolving. You know, I like to use the Ray-Ban, Ray-Ban glasses as an example. When it was firstly built, people thought they're gonna take photos and post it on Instagram, which is a good use case for social media. But now whatever the glass see, Llama see, multimodal models, you ask, "What is this?" And the model tells you. It's a different way of using the computing. That's gonna be another wave. Industrial, while there's incredible things happening on the data center, what I hear from industrial companies is, "I need to move my AI to the edge." You saw, like, we signed an MOU with Aramco, one of the largest companies in the world. There are so many things happening. Mm. with this transformation, so I think we're at the beginning of a great story for Qualcomm. Mm. We're just gonna continue to execute. Got it, and I think with that, we'll leave it there. Thank you so much. Thank you. Thank you so much.