(Bloomberg) -- Qualcomm Inc., the biggest maker of chips that run smartphones, surged in late trading after giving a strong sales forecast, bolstered by its expansion into new markets.

Revenue will be $10.5 billion to $11.3 billion in the fiscal third quarter, Qualcomm said on Wednesday. That compares with an average analyst estimate of $9.97 billion. Profit will be $2.75 to $2.95 a share, above a $2.60 average projection.

Qualcomm’s main product is the processor that runs many of the world’s smartphones, and another of its chips connect Apple Inc.’s iPhone to high-speed data networks. That makes it particularly vulnerable to swings in demand for such devices. But under Chief Executive Officer Cristiano Amon, the company is trying to parlay that skill set into a growing presence in cars, networking and computers.

Qualcomm shares, which had slid this year in line with a general decline in chip stocks, rose 7.3% in extended trading following the announcement. They closed at $135.10 in New York trading on Wednesday.

Analysts have pointed to slowing demand for Android phones in China, the largest market for phones, as a threat to growth. But sales of Qualcomm’s phone-related chips were higher than expected last quarter. They came in at $6.33 billion, compared with an estimate of $5.99 billion.

Revenue from the Internet of Things -- efforts to add computing power to a wider range of devices and appliances -- was $1.7 billion. That compares with an average projection of $1.6 billion.

Excluding certain items, profit in the fiscal second quarter was $3.21 a share, compared with Wall Street’s average estimate of $2.93. The company generated $11.2 billion in revenue, topping the $10.6 billion projection.

Like many other chipmakers, Qualcomm outsources its production and has struggled to get enough supply from its Asian subcontractors over the last two years. The company’s leaders have promised it will be able to strike a better balance between supply and demand as 2022 progresses. 

In prior quarters, Qualcomm has focused on providing the most expensive smartphone parts -- at the expense of orders from makers of cheaper smartphones. But Amon’s longer-term strategy is diversifying the company. He has said that his tenure should be judged by Qualcomm’s progress in newer, higher-growth areas.

Qualcomm had set aggressive goals for its growth fueled by its expansion outside of phone. Revenue has the potential to top $46 billion by fiscal year 2024, Qualcomm Chief Financial Officer Akash Palkhiwala said at a company event late last year. 

The company is unusual in the chip industry because a large chunk of its profit comes from technology licensing. Makers of phones pay to use Qualcomm’s technology, regardless of whether they buy its chips, because the company owns patents that cover some of the fundamentals of mobile communications.

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