Qualcomm Incorporated (QCOM Quick QuoteQCOM - Free Report) has landed in the midst of the ongoing trade skirmishes between the United States and China, with the communist nation launching an antitrust regulation probe against the chipmaker. The investigation has been ordered as Qualcomm reportedly failed to inform China’s market regulator about the buyout of Israel-based Autotalks. The acquisition of this vehicle-to-everything (V2X) communication systems provider in June 2025 was made despite being informed by China's State Administration for Market Regulation that the deal would require its regulatory approval due to sensitive geopolitical issues. 

With Qualcomm acknowledging its shortcomings, Beijing was quick to pounce on it, initiating a thorough inquiry into whether the U.S. firm violated China's antitrust law. However, it appears that the chipmaker is the latest pawn in the U.S.-China tussle, with President Trump ratcheting up tariff and trade tensions as a tit-for-tat response by threatening to impose an additional 100% tariff on Chinese goods starting on Nov. 1, 2025. This triggered a stern response from Beijing as it threatened to retaliate with reciprocal tariffs. 

This, in turn, had a knee-jerk reaction on QCOM shares, which skidded as concerns regarding China refused to subside. With one of the biggest footprints in the communist nation by a U.S.-based firm, the market uncertainties seem to be taking a toll on its stock-market performance. Moreover, as China accounts for the lion’s share of Qualcomm’s revenues, any disruption in local operations is bound to have a ripple effect across the company.

Qualcomm shares have plunged 13.7% over the past year against the industry’s growth of 39.3%. It has underperformed peers like Hewlett Packard Enterprise Company (HPE Quick QuoteHPE - Free Report) and Broadcom Inc. (AVGO Quick QuoteAVGO - Free Report) . Hewlett Packard has surged 17.8% and Broadcom is up 78.1% over this period. 

One-Year QCOM Stock Price Performance

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Bitter Trade Ties With China Hurt QCOM

Much of these hardships can be attributed to the continued U.S.-China trade spat. The chip-making firm has a significant presence in more than 12 cities in China, aiming to drive advancements in semiconductors and mobile telecommunications for the larger benefit. The company has been a key supplier of chips and other related components to local smartphone manufacturers like Xiaomi, Huawei and its spin-off brand Honor. However, Qualcomm is increasingly finding it difficult to maintain its operations in China.

The U.S. Commerce Department has long imposed various trade restrictions against China,  banning the sale of high-tech equipment, chips, components and related technology to develop high-end smartphones and AI-enabled chips. The U.S. administration recently extended the export controls that plugged almost all loopholes to block Beijing’s access to cutting-edge chips and the latest software technology.

High R&D Costs Dent QCOM Margins

To add to the woes, Qualcomm's margins have declined over the years due to high operating expenses and R&D (research & development) costs. The company expects softness in the handset market and a weaker overall mix of devices to continue in the near future. The shift in the share among original equipment manufacturers at the premium tier has reduced the near-term opportunity to sell integrated chipsets from the Snapdragon platform. In addition, Qualcomm faces stiff competitive pressures from rivals Broadcom and Hewlett Packard. Aggressive competition from low-cost chip manufacturers and established players in the mobile phone chipset market is also likely to hurt Qualcomm's profits. Although the global smartphone market is expected to maintain its momentum over the next three to four years, a major portion of this growth is likely to come from the low-cost emerging markets, which may weigh on Qualcomm's margins. 

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Solid Snapdragon, Automotive Traction Buoy QCOM

Despite the short-term headwinds, Qualcomm is benefiting from investments toward building a licensing program in mobile. The company envisions solid growth opportunities within the mobile space, driven by the strength of its Snapdragon portfolio. Leveraging processors with multi-core CPUs, featuring cutting-edge technology, amazing graphics and worldwide network connectivity, Qualcomm Snapdragon mobile platforms are fast and offer superb power efficiency. Smartphones and mobile devices built with Snapdragon mobile platforms enable immersive augmented reality and virtual reality experiences, brilliant camera capabilities, superior 4G LTE and 5G connectivity with state-of-the-art security solutions.

Qualcomm is currently expanding its AI capabilities within the laptop and desktop market with the launch of the Snapdragon X chip for mid-range AI desktops and laptops. The strategy is aimed at moving beyond the slowing smartphone industry, which is its primary breadwinner. In addition to diversifying its revenue stream, this is likely to further extend QCOM’s AI footprint.

The automotive telematics and connectivity platforms, digital cockpit and C-V2X solutions are fueling emerging automotive industry trends such as the growth of connected vehicles, the transformation of the in-car experience and vehicle electrification. The buyout of Veoneer, Inc. has offered Qualcomm a firmer footing in the emerging market of driver-assistance technology, as it aims to extend the Snapdragon Ride Advanced Driver Assistance Systems (ADAS) portfolio. With the acquisition, Qualcomm has incorporated Arriver's Computer Vision, Drive Policy and Driver Assistance assets into its ADAS portfolio to deliver an open and competitive platform for automakers to better compete with rivals within the self-driving vehicle market.  

Estimate Revision Trend for QCOM

Earnings estimates for Qualcomm for fiscal 2025 have moved up 8.8% to $11.89 over the past year, while the same for fiscal 2026 has declined 2.4% to $11.88. The mixed estimate revision depicts that investors are skeptical about the growth potential for the stock.

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End Note

With robust automotive and Snapdragon traction, Qualcomm appears to be relatively better placed in terms of its portfolio strength. A strong emphasis on quality, diligent execution of operational plans and continuous portfolio enhancements are driving more value for customers. With a mixed bag of earnings estimates, the stock is witnessing neither too positive nor too negative investor sentiment. 

Moreover, stiff competition and softness in key end markets are likely to put pressure on the bottom-line growth. High R&D costs erode its profitability to a large extent. Qualcomm is facing a tough operating environment in China amid escalating tariffs and anti-trust investigations, raising questions about its long-term viability plans in the communist country. With a Zacks Rank #3 (Hold), Qualcomm appears to be treading in the middle of the road, and investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.