● Covered by 2 sources · 2 reportsMedium impact2 neutral
Qualcomm Stock Drops 6% on Weaker-than-Expected Earnings Forecast
Key points
- QTL revenue: $1.46 billion, versus $1.41 billion expected
- Q4 EPS: $2.17 adjusted, versus $2.16 expected
- Q4 Revenue: $10.44 billion, adjusted
- Q1 2024 forecast: EPS $2.15-$2.35, Revenue $10.4B-$11.2B
- Qualcomm projects $650 million in data center revenue for Q1 2027.
- Qualcomm projects $5 billion in data center revenue by the end of 2027.
- Qualcomm projects $15 billion in data center revenue by 2029.
- Smartphone sales declined by 20% in 2026 compared to 2025.
- Qualcomm expects data centers to eventually comprise 30% of its total business.
Quarterly Performance and Forecast
Qualcomm announced quarterly results that surpassed analyst expectations, with adjusted earnings per share of $2.17 against an expected $2.16, and adjusted revenue of $10.44 billion. However, the company's forecast for the current quarter projected earnings per share between $2.15 and $2.35 on revenue of $10.4 billion to $11.2 billion, which was below analyst estimates, leading to a 6% drop in stock value during extended trading.
Smartphone Market Challenges
The majority of Qualcomm's chip sales come from smartphone components, a market currently facing challenges due to rising memory costs impacting demand. Handset chip sales for the quarter fell 26% year-over-year to $5.14 billion. Despite this, Qualcomm noted sequential growth in the category and believes Android shipments in China have bottomed out, though it anticipates a flat handset market through 2027.
Diversification into New Markets
Under CEO Cristiano Amon, Qualcomm is diversifying its business beyond smartphones. The company's automotive division saw an 89% increase in revenue year-over-year, reaching $1.99 billion. Internet of Things (IoT) revenue also grew 4% to $1.88 billion. Qualcomm is also targeting the AI data center infrastructure market, reporting $650 million in data center revenue for the quarter and projecting $5 billion in fiscal 2027, with recent customer engagements for optical connectivity and a global hyperscaler.
Updates
- Qualcomm projects $650 million in data center revenue for Q1 2027.
- Qualcomm projects $5 billion in data center revenue by the end of 2027.
- Qualcomm projects $15 billion in data center revenue by 2029.
- Smartphone sales declined by 20% in 2026 compared to 2025.
- Qualcomm expects data centers to eventually comprise 30% of its total business.
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
The daily brief
One email each morning: the day's tech stories, clustered across outlets and summarized. No account needed.
One email a day. Unsubscribe in one click, any time.
Today's brief
Spend a few minutes, get the whole day. Every topic's top stories in one hands-free rundown — listen, watch, or read the transcript.
▶ Play today's brief
New every morning, and the back catalogue is archived by date.
How outlets covered it
Qualcomm announced plans to significantly expand its presence in the AI data center market, projecting $650 million in revenue for Q1 2027 and $15 billion by 2029. This strategic pivot comes as smartphone sales declined by approximately 20% in 2026, with the company aiming for data centers to eventually comprise 30% of its total business.
Qualcomm reported quarterly results that exceeded Wall Street estimates but issued a lower-than-expected earnings forecast for the current quarter, causing its stock to drop 6%. The company's handset chip sales declined significantly, while automotive and IoT revenues increased, and it is expanding into AI data center infrastructure.