Handset Weakness Drags Qualcomm Q3 Revenue Down 4%; Q4 EPS Guidance Falls Short of Consensus
QCOM sits 22% above its 52-week low of $121.99.
Summary
Qualcomm's Q3 FY2026 revenue fell 4% YoY to $9.95 billion, as a 20% drop in handset chip sales overshadowed 61% automotive growth. Q4 EPS guidance of $2.05–$2.25 missed consensus, despite the closing of the Modular acquisition.
Key Events · Earnings and Guidance · QCOM
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Q3 Revenue Down 4% on Handset Weakness
Total revenue of $9.95 billion fell 4% YoY, as QCT handset revenue dropped 20% to $5.09 billion, offset partially by 61% growth in automotive to $1.59 billion and 9% growth in IoT to $1.83 billion.
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Q4 EPS Guidance Misses Consensus
Non-GAAP EPS guidance of $2.05–$2.25 fell short of the $2.36 consensus, with revenue guidance of $9.7–$10.5 billion implying a sequential decline at the midpoint.
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Non-Handset Diversification Accelerating
Combined QCT automotive and IoT revenue grew 28% YoY; management expects non-handset revenue growth to accelerate from 24% in FY2026 to over 60% in FY2027, targeting $40 billion by FY2029.
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Modular Acquisition Closed
Completed the $3.1 billion acquisition of Modular Inc to strengthen AI capabilities, contributing to goodwill increase to $14.3 billion.
Analysis · QCOM · Manufacturing
A 20% plunge in handset chip sales drove Qualcomm's Q3 revenue down 4% year-over-year to $9.95 billion, even as automotive revenue surged 61%. The real sting, however, is the Q4 guidance: Non-GAAP EPS of $2.05–$2.25 fell well short of the $2.36 consensus, and the midpoint of the revenue range implies another sequential decline. While the company navigates a tough memory and supply cost environment, the non-handset diversification story is gaining traction—automotive and IoT combined grew 28%, and management expects non-handset revenue growth to accelerate to over 60% in fiscal 2027. The $3.1 billion Modular acquisition has closed, bolstering AI capabilities. With $2.3 billion returned to shareholders this quarter, the buyback provides some support, but the near-term earnings miss and soft handset demand are likely to weigh on the stock.
At the time of this filing, QCOM was trading at $148.37 on NASDAQ in the Manufacturing sector, with a market capitalization of approximately $164.1B. The 52-week trading range was $121.99 to $259.92. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.