Here's the next big thing from Qualcomm $QCOM (-2,78%)
(NASDAQ: QCOM) Q3 FY26 Earnings Release, fresh off the US market close:
🚀 Top-Line Performance & Diversification
Qualcomm $QCOM surpassed the $9.90 billion in total revenue. While this represents a slight year-over-year decline, it clearly exceeded Wall Street’s expectations, which were around 9.67 billion USD. The semiconductor division QCT remains the main driver of growth with $8.50 billion, while the highly profitable patent licensing division (QTL) posted a solid 1.30 billion USD .
đź”® Automotive Record & Smartphone Low
The transformation from a pure-play smartphone chipmaker to a platform giant for automotive and edge AI is proceeding at a rapid pace:
Automotive Boom: Revenue in the automotive segment skyrocketed by +61% year-over-year to a record high of $1.59 billion . This marks the 23rd consecutive quarter of double-digit growth for Qualcomm’s Digital Chassis platform.
IoT & Edge AI: The Internet of Things segment grew slightly by +9% to $1.83 billion .
Smartphone Slump (Handsets): Revenue from smartphone chips fell by -20% year-over-year to $5.10 billion. However, CEO Cristiano Amon confirmed that this likely indicates the bottom has been reached in inventory adjustments among Chinese OEM customers.
🤖 Profitability & Outlook
Management also paints a solid picture when it comes to margins and the outlook:
Adjusted earnings per share (Adjusted EPS) stood at $2.21 , was just below the analysts’ consensus (~$2.23).
Q4 Forecast: For the fourth quarter, Qualcomm is forecasting revenue of between $9.70 billion and $10.50 billion and EPS of $2.05 to $2.25 .
Long-term goal: The goal of $40 billion in revenue in the non-smartphone segment by FY2029 remains fully intact, with growth in new markets such as data centers and AI chips expected to accelerate to over +60% in FY2027.
⚡ 💡 Jack’s Conclusion
The pivot from smartphone supplier to automotive and AI edge player is going according to plan! The handset business may have suffered from general smartphone fatigue, but +61% growth in the automotive sector impressively demonstrates that Qualcomm is keeping the cars of the future on their toes. With a valuation of just under 15x P/E, the stock remains one of the most reasonably priced value/quality plays in the semiconductor sector.
