QCOM — QUALCOMM Incorporated

As of 2026-08-27, the mood is cautious-to-bearish: fiscal Q3 2026 revenue beat at $9.95B, but non-GAAP EPS missed at $2.21, net income dropped 25% YoY, Q4 guidance was soft, and the Apple modem transition remains an overhang. The stock has already been de-rated from the $260s to the $160s; Wall Street consensus is Hold despite average targets near $205-$214.

The 3-year revenue trend shows a clear peak and rollover: revenue grew from $8.63B in Sep-2023 to $12.25B in Dec-2025, but the last two reported quarters declined YoY (Q2 FY26 $10.60B, -3.5%; Q3 FY26 $9.95B, -4.0%), and Q3 FY26 is 19% below the Dec-2025 peak. Operating margin compression is the bigger red flag: Q3 FY26 operating margin fell to 16.4% from 26.7% a year earlier, while gross margin slipped from 55.6% to 53.0% and R&D spending rose 17% YoY to $2.61B. Free cash flow collapsed to $0.50B in Q3 FY26 from $2.58B in Q3 FY25. Note that Q2 FY26 net income of $7.37B includes a large non-operating gain and Q4 FY25 included a -$3.12B impairment, so those single-quarter EPS figures should not be treated as run-rate earnings.

As of 2026-08-27, QCOM is fairly valued, not cheap. TTM P/E is 18.77 and P/S is 3.93, both almost exactly in line with QCOM's 5-year averages of 18.89 and 3.93, though trailing figures are distorted by one-time items. On next-fiscal-year consensus EPS of $10.57, the forward P/E is about 15.6x. For a business with two consecutive quarters of negative revenue growth and operating margins down about 10 points YoY, 15.6x forward earnings is reasonable rather than a deep-value entry; the 1.48% dividend yield is a minor backstop.

As of 2026-08-27, at $164.78 with forward EPS near $10.57, the market is pricing no growth and ongoing margin pressure, but not a collapse. If guidance disappoints again and FY27 estimates are cut below $10.00, the stock likely re-rates lower. If data center/auto revenue starts showing up in segment numbers and non-handset growth exceeds the smartphone decline, current estimates and the $205-$214 analyst targets become achievable. Earnings estimates are the swing factor; multiple expansion will not happen until revenue and margin stabilize.

As of 2026-08-27, technicals are neutral-to-weak: RSI-14 is 49.21, price is 2.36% above the 20-day SMA but 5.56% below the 50-day SMA and 1.9% below the 200-day SMA. That is a range-bound, trendless picture after a sharp selloff, not an oversold setup or a confirmed reversal. For entry timing, I would want to see a close back above the 50-day and 200-day moving averages, or a retest of the low-$150s area with stabilizing RSI, before treating this as a low-risk entry.

• Global smartphone replacement cycle remains sluggish, pressuring QCT's core handset revenue and margins.
• AI infrastructure spending is bifurcating semis: hyperscalers are spending heavily on AI compute, but QCOM's data center CPU wins are still years from material revenue.
• High-beta tech (beta 1.66) remains sensitive to interest-rate moves, though QCOM's current ratio of 2.02 and debt-to-equity of 0.55 provide balance-sheet cushion.
• US-China export controls and geopolitical tensions add license, regulatory, and supply-chain uncertainty.
• Sector rotation within semis favors AI winners like NVDA and AVGO, leaving QCOM valued as a handset play; a narrative shift could narrow that gap.

• Next quarterly report (likely early November 2026) and whether revenue and margins stabilize versus Q4 guidance.
• Data center CPU milestones: Meta Dragonfly C1000 production (late 2028), Microsoft Azure deployments, and any additional hyperscaler design wins.
• Automotive scaling: record $1.59B auto revenue in Q3 FY26 (+61% YoY) and the BMW ADAS/cockpit ramp.
• Clarity on the Apple modem transition, including the size and timing of the revenue hole and any offsetting wins.
• Ex-dividend date September 3, 2026 ($0.92/share payable September 24, 2026).

• Apple modem loss could accelerate, reducing QCT revenue and high-margin QTL licensing faster than current estimates assume.
• Handset market stays soft, extending negative YoY revenue and compressing operating margins further.
• Data center/auto pivot does not scale in time; the $40B non-handset revenue target by 2029 slips.
• R&D spend is rising 17% YoY while revenue falls, so operating margin could stay below 20% for several quarters.
• AI data center CPU competition from NVIDIA, AMD, Broadcom, and hyperscaler custom silicon, plus Arm license/architecture risk.
• Geopolitical, tariff, and export-control shocks in key markets such as China.

QCOM is not a compelling buy at $164.78 as of 2026-08-27. The reported business is shrinking and margin deterioration is real, so the stock is only fairly valued rather than cheap; the data center and automotive stories are credible but not yet visible in consolidated results. I would wait for either a lower entry point or concrete evidence that revenue and operating margin have stabilized before putting new capital to work.

Calculated by applying a 15.0x forward P/E to next-fiscal-year consensus EPS of $10.57 (15.0 x 10.566 = 158.49). The 15x multiple is a deliberate discount to QCOM's 5-year average P/E of about 18.9x, justified by negative near-term revenue growth, roughly 10-point operating margin compression, and unresolved Apple modem risk; it also sits near the conservative end of the analyst target range once those risks are factored in.