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Is Qualcomm Stock a Smart Buy Before Q3 Earnings Release?
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Key Takeaways
QCOM to report fiscal Q3 2026 earnings on July 29, with sales estimated at $9.71 billion and EPS at $2.22.
Qualcomm expanded Snapdragon across smartphones and AI PCs, supporting broader market reach.
QCOM faces smartphone competition, pricing pressure and mixed Android demand despite AI momentum.
Qualcomm Incorporated (QCOM - Free Report) is scheduled to report third-quarter fiscal 2026 earnings after the closing bell on July 29. The Zacks Consensus Estimate for sales and earnings is pegged at $9.71 billion and $2.22 per share, respectively. Earnings estimates for QCOM for fiscal 2026 have increased 0.4% to $10.78 over the past 60 days, and those for fiscal 2027 have also increased 1.7% to $10.88.
QCOM Estimate Trend
Image Source: Zacks Investment Research
Earnings Surprise History
The chip manufacturer delivered a trailing four-quarter earnings surprise of 3.28%, on average, beating estimates on each occasion. In the last reported quarter, the company pulled off an earnings surprise of 3.11%.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Qualcomm for the fiscal third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
During the to-be-reported quarter, Qualcomm introduced two new Snapdragon mobile platforms to enhance performance, deliver advanced artificial intelligence (AI) capabilities and improve user experiences across the mid-range and entry-tier smartphone markets. The launches strengthened the company's smartphone offerings and reinforced its presence in high-volume device categories. This is likely to have led to incremental handset revenues.
The company also expanded its AI PC portfolio with the launch of the Snapdragon C platform, extending its reach into the entry-tier laptop market. Offering AI-powered computing, reliable performance and improved power efficiency at an affordable price point, the platform enables the company to address a broader customer base. Early processor demand from PC manufacturers ahead of new device launches is expected to support chipset shipments, providing a favorable contribution to Qualcomm's fiscal third-quarter results.
In the quarter under review, Qualcomm continued to diversify its business by expanding its presence across PCs, connected devices and edge AI applications. The company's broader Snapdragon platform is expected to increase its exposure to multiple high-growth markets while reducing its reliance on the smartphone segment over time. These strategic initiatives are expected to strengthen Qualcomm's long-term growth prospects and are likely to have a positive impact during the June quarter.
Despite strong momentum in AI, PCs and automotive, Qualcomm continues to face intense competition in its smartphone chipset business. Memory supply constraints and related price increases affect device economics. Management expects handset revenues from Chinese customers to bottom in the fiscal third quarter, assuming weaker low-tier handset units sequentially, which can weigh on the licensing revenue mix. The company is witnessing increasing pricing pressure from rival chipmakers, particularly in the Android market, which could weigh on margins. At the same time, continued investments in AI, automotive, data center and XR technologies are likely to have kept operating expenses elevated during the quarter. Mixed demand in the global smartphone market, especially in the entry-level segment, might have also limited chipset shipments.
Price Performance
Over the past year, Qualcomm has gained 9.8% compared with the industry’s growth of 61%, underperforming competitors like Intel Corporation (INTC - Free Report) and Broadcom Inc. (AVGO - Free Report) . While Broadcom has gained 38.7%, Intel has surged 329.6% over the said time frame.
Image Source: Zacks Investment Research
Key Valuation Metric
From a valuation standpoint, Qualcomm appears to be relatively cheaper compared to the industry and below its mean. Going by the price/earnings ratio, the company’s shares currently trade at 16.07 forward earnings, lower than 30.2 for the industry and the stock’s mean of 16.58.
Image Source: Zacks Investment Research
Investment Considerations
By strengthening its leadership in on-device AI, premium Snapdragon platforms and connected-edge technologies, Qualcomm is well-positioned to diversify its revenue base beyond smartphones. Continued momentum in Automotive and IoT, expanding AI capabilities and the company's entry into the data center market are expected to support long-term revenue growth, improve product diversification and strengthen earnings potential.
However, persistent weakness in the Android smartphone market due to industry-wide memory supply constraints, coupled with customer concentration and intense competition in the semiconductor industry, is expected to weigh on near-term revenues. In addition, geopolitical uncertainties, evolving trade policies and the gradual transition of major customers toward in-house chip development are likely to remain key challenges for the company’s growth and profitability.
End Note
Qualcomm continues to maintain a strong competitive position, supported by its robust technology portfolio and leadership in wireless communications. Upward revisions in earnings estimates also reflect improving investor confidence. However, persistent competitive pressures in the handset market, customer concentration and an uncertain macroeconomic environment could limit near-term upside, making the stock less attractive ahead of the quarterly results.
Existing investors may continue to hold the stock, supported by its attractive valuation, strong product lineup and ongoing efforts to diversify its business across multiple end markets, which should provide a solid foundation for sustainable long-term growth.
View the Zacks #1 Rank List
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Is Qualcomm Stock a Smart Buy Before Q3 Earnings Release?
Key Takeaways
Qualcomm Incorporated (QCOM - Free Report) is scheduled to report third-quarter fiscal 2026 earnings after the closing bell on July 29. The Zacks Consensus Estimate for sales and earnings is pegged at $9.71 billion and $2.22 per share, respectively. Earnings estimates for QCOM for fiscal 2026 have increased 0.4% to $10.78 over the past 60 days, and those for fiscal 2027 have also increased 1.7% to $10.88.
QCOM Estimate Trend
Image Source: Zacks Investment Research
Earnings Surprise History
The chip manufacturer delivered a trailing four-quarter earnings surprise of 3.28%, on average, beating estimates on each occasion. In the last reported quarter, the company pulled off an earnings surprise of 3.11%.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Qualcomm for the fiscal third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Qualcomm currently has an ESP of -0.58% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping Upcoming Results
During the to-be-reported quarter, Qualcomm introduced two new Snapdragon mobile platforms to enhance performance, deliver advanced artificial intelligence (AI) capabilities and improve user experiences across the mid-range and entry-tier smartphone markets. The launches strengthened the company's smartphone offerings and reinforced its presence in high-volume device categories. This is likely to have led to incremental handset revenues.
The company also expanded its AI PC portfolio with the launch of the Snapdragon C platform, extending its reach into the entry-tier laptop market. Offering AI-powered computing, reliable performance and improved power efficiency at an affordable price point, the platform enables the company to address a broader customer base. Early processor demand from PC manufacturers ahead of new device launches is expected to support chipset shipments, providing a favorable contribution to Qualcomm's fiscal third-quarter results.
In the quarter under review, Qualcomm continued to diversify its business by expanding its presence across PCs, connected devices and edge AI applications. The company's broader Snapdragon platform is expected to increase its exposure to multiple high-growth markets while reducing its reliance on the smartphone segment over time. These strategic initiatives are expected to strengthen Qualcomm's long-term growth prospects and are likely to have a positive impact during the June quarter.
Despite strong momentum in AI, PCs and automotive, Qualcomm continues to face intense competition in its smartphone chipset business. Memory supply constraints and related price increases affect device economics. Management expects handset revenues from Chinese customers to bottom in the fiscal third quarter, assuming weaker low-tier handset units sequentially, which can weigh on the licensing revenue mix. The company is witnessing increasing pricing pressure from rival chipmakers, particularly in the Android market, which could weigh on margins. At the same time, continued investments in AI, automotive, data center and XR technologies are likely to have kept operating expenses elevated during the quarter. Mixed demand in the global smartphone market, especially in the entry-level segment, might have also limited chipset shipments.
Price Performance
Over the past year, Qualcomm has gained 9.8% compared with the industry’s growth of 61%, underperforming competitors like Intel Corporation (INTC - Free Report) and Broadcom Inc. (AVGO - Free Report) . While Broadcom has gained 38.7%, Intel has surged 329.6% over the said time frame.
Image Source: Zacks Investment Research
Key Valuation Metric
From a valuation standpoint, Qualcomm appears to be relatively cheaper compared to the industry and below its mean. Going by the price/earnings ratio, the company’s shares currently trade at 16.07 forward earnings, lower than 30.2 for the industry and the stock’s mean of 16.58.
Image Source: Zacks Investment Research
Investment Considerations
By strengthening its leadership in on-device AI, premium Snapdragon platforms and connected-edge technologies, Qualcomm is well-positioned to diversify its revenue base beyond smartphones. Continued momentum in Automotive and IoT, expanding AI capabilities and the company's entry into the data center market are expected to support long-term revenue growth, improve product diversification and strengthen earnings potential.
However, persistent weakness in the Android smartphone market due to industry-wide memory supply constraints, coupled with customer concentration and intense competition in the semiconductor industry, is expected to weigh on near-term revenues. In addition, geopolitical uncertainties, evolving trade policies and the gradual transition of major customers toward in-house chip development are likely to remain key challenges for the company’s growth and profitability.
End Note
Qualcomm continues to maintain a strong competitive position, supported by its robust technology portfolio and leadership in wireless communications. Upward revisions in earnings estimates also reflect improving investor confidence. However, persistent competitive pressures in the handset market, customer concentration and an uncertain macroeconomic environment could limit near-term upside, making the stock less attractive ahead of the quarterly results.
Existing investors may continue to hold the stock, supported by its attractive valuation, strong product lineup and ongoing efforts to diversify its business across multiple end markets, which should provide a solid foundation for sustainable long-term growth.