Key Highlights

  • QCOM shares fell 4.68% pre-market to $147.77, down from a prior close of $155.68.
  • Fiscal Q3 revenue of $9.95 billion topped estimates, but adjusted EPS of $2.21 missed the $2.22 consensus as a 20% handset revenue decline offset 61% automotive growth.
  • Q4 revenue guidance of $9.7 billion to $10.5 billion and EPS guidance of $2.05 to $2.25 came in below Street expectations of $10.07 billion and $2.38.
  • Management flagged plans to raise chip prices to offset higher input costs and reiterated a long-term $15 billion annual data-center AI revenue ambition by fiscal 2029.

Handset Weakness Offsets Automotive Strength

Qualcomm (NASDAQ:QCOM) shares are sliding pre-market after closing sharply lower Wednesday, as investors reacted to a mixed fiscal third-quarter report and soft guidance amid a broader semiconductor sell-off. Revenue of $9.95 billion topped estimates, but adjusted EPS of $2.21 missed the $2.22 consensus, as a 20% handset revenue decline and rising memory costs offset 61% automotive growth.

Qualcomm, headquartered in San Diego, California and led by CEO Cristiano Amon, is a leading semiconductor and wireless technology company operating through three segments: QCT chipsets and system software, QTL technology licensing, and QSI strategic investments. Q4 revenue guidance of $9.7 billion to $10.5 billion and EPS guidance of $2.05 to $2.25 came in below Street expectations of $10.07 billion and $2.38, sending shares down further in after-hours trading.

Diversification Targets and Apple Relationship

Qualcomm carries a market capitalization of approximately $164.09 billion, with shares trading at a forward price-to-earnings ratio of 13.35 and a trailing multiple of 13.06. The stock's 52-week range spans $121.99 to $259.92, and the dividend yield stands at 2.31%.

Management flagged plans to raise chip prices to offset higher input costs and reiterated long-term diversification targets, raising its fiscal 2029 non-handset revenue outlook to $40 billion from $22 billion, including more than $24 billion from automotive and IoT and $15 billion from data center. The company's relationship with Apple Inc. (NASDAQ:AAPL) is expected to decline materially, with the company's share on the upcoming iPhone launch now expected to be well below the prior 20% estimate, driving an approximate 50% sequential decline in Apple-related revenue from the September to December quarter.

New wins including a landmark BMW compute silicon agreement and expanded Stellantis collaboration helped raise the automotive business's fiscal 2026 exit run-rate target to approximately $7 billion, up from a prior $6 billion target, with automotive revenue expected to grow roughly 60% year-over-year. The company also disclosed completion of its acquisition of Modular, intended to strengthen its AI software stack for data center and edge AI applications.

Conclusion

Qualcomm's decline reflects a genuine earnings and guidance miss driven by handset weakness and rising input costs, even as the company's automotive and data-center diversification efforts continue to gain traction. With the Apple relationship expected to shrink further and chip prices set to rise, investors will be watching whether non-handset revenue growth can offset the structural decline in Qualcomm's largest historical customer relationship.

This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research before making financial decisions.