The Qualcomm-sponsored racecar emphasizes the speed that the chipmaker seeks in its products. Image source: Qualcomm.

Chipmaker giant Qualcomm (QCOM 1.56%) has gone through some growing pains lately as its revenue and profits have fallen sharply from their best levels in 2014 and 2015. After several quarters of weaker results, Qualcomm could finally be close to a turnaround, and coming into Wednesday's fiscal third-quarter financial report, Qualcomm investors are hoping that this will be the last time it will see declines in the top and bottom lines for the chipmaker. Yet investors will want to see evidence that the chipmaker believes its own future is likely to get brighter for the rest of the fiscal year and beyond. Let's take an early look at how Qualcomm is likely to do and what's ahead for the tech giant.

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Data source: Yahoo! Finance.

Can Qualcomm bounce back?

In recent months, investors have gotten less enthusiastic about Qualcomm's earnings prospects. They've cut their earnings projections for the fiscal third quarter by a nickel per share, and they've made an even larger $0.15 per share cut to their fiscal 2017 estimates. Yet the stock has performed better, climbing 7% since mid-April.

Qualcomm's fiscal second-quarter results in April continued the long downward trend for its fundamental performance. Revenue dropped 19%, matching the previous quarter's pace of decline, and the drop in net income accelerated to more than a third. Some investors were heartened that the results were actually better than many had expected, but particular weakness in the QCT semiconductor business dragged Qualcomm as a whole downward. The best spin on the news was that sequentially, the results were somewhat better than Qualcomm had posted in its fiscal first quarter, but seasonal issues might have played a role in that fact as well. Guidance was also somewhat downbeat, leading to the cut in expectations on earnings and predicting a drop of as much as a fifth in shipments of Qualcomm's mobile station modem chipsets.

Is a turnaround coming for Qualcomm?

Qualcomm continues to work on bolstering its innovative spirit, and recent events have kept up its momentum. The release of the Snapdragon 821 custom 64-bit chip offers speed improvements over the Snapdragon 820 on which it's based, and greater power savings with better performance also make it more attractive. By having a product that can meet the needs of top-of-the-line buyers, Qualcomm hopes that it can hold onto its existing high-end customer base as well as wooing new potential customers into the fold.

Yet one threat to Qualcomm has been moves from mobile-device makers to produce their own chips. Back in May, reports suggested that China's Xiaomi might make a move to bring its chip production in-house, taking away what has been a lucrative line of smartphones from Qualcomm's grasp as a chip supplier. When customers make these moves, Qualcomm not only loses the direct business from that customer but also faces the threat of having to compete against the customer's chip products for the business of supplying smaller buyers.

Some believe that the answer to Qualcomm's issues is to make a major acquisition in a company with a slightly different focus. By diversifying away from its concentration on the mobile chip business, Qualcomm could find new avenues for growth. Areas like the field-programmable gate array market and the near-field communications specialty could be potential industry opportunities for Qualcomm, and major companies are available in both fields that Qualcomm could arguably afford.

In the Qualcomm earnings report, guidance for the future will be more important than usual, because investors are growing impatient with the pace of the tech giant's turnaround. If Qualcomm can get itself back on a growth trajectory going forward, then the stock could keep adding to its recent gains and be quite rewarding for shareholders in the long run.